Blockchain is about to become the beating heart of the finance industry, say some US and international financial industry experts.
What is it?
And does it have a future in auto finance?
Blockchain technology is a way to record and confirm transactions across a peer-to-peer network. In financial transactions, it eliminates the use of a bank or other central certifying authority. While Bitcoin is probably the most currently discussed form of blockchain technology, other future applications are poised to become realities in the not so distant future – in voting, healthcare, insurance, and possibly, one day, the auto finance industry.
“The best news about this technology is that it will enable lenders to lower operating costs and possibly legal costs,” says Georgine.
She further simplifies the blockchain explanation by equating it to Google Sheets.
“If my vendor and I had a single Google sheet that we shared security access to, we can both edit that single document, and if we had a variance it would not be accepted as a valid entry,” she says. “Only when correct would we agree that is the amount due to/from each other.”
“[Blockchain] made me think of bureaus back in the day,” says Stephanie. “The difference to me seems to be this is not just around credit or transactions. It’s a full-on ledger of ‘transactions’ and a one source of truth that everyone can pull from and use.”
Stephanie continues, “So if it comes to be, it definitely impacts auto.”
As Zulovich points out in his article on blockchain technology, Toyota Financial Services has joined with R3 Consortium, a collaboration of over fifty big banks and corporation, in a partnership to explore distributed ledgers and automotive financial services.
Read the complete SubPrime Auto News article “How blockchain technology might impact auto finance.”
Watch Haskell Garfinkel of PwC present “Blockchain – What is it and what it could mean to you?” at the American Financial Services Association (AFSA) Vehicle Finance Conference in Las Vegas.
Read "Envisioning Bitcoin’s Technology at the Heart of Global Finance" in The New York Times.
Read "Engine for Blockchain: Toyota Financial Services" joins R3 in The CoinTelegraph