Experts agree that Blockchain’s utilization In the vehicle retail channel is imminent
Among the many panels of subject matter experts at the recent AFSA Vehicle Finance Conference tackling the latest technology topics facing the industry, the subject of Blockchain drew a standing room only crowd of execs looking for information to determine if and when using Blockchain is right for their businesses.
Blockchain refers to a technique of recording transaction details on a system of distributed ledgers, where a group of market participants agrees to keep a copy of all transactions. Sharing transaction details in this manner eliminates reliance on traditional record-keepers and prevents manipulation of the data, as the accuracy of any piece of information can be compared to the copies held elsewhere.
One common thread in describing the phenomenon of Blockchain today is to compare it to the early days of the internet. For example, using a vehicle identification number (VIN) as a unique identifier of a particular vehicle, that VIN lives in Blockchain and has tremendous benefits to sellers, buyers, finance companies and service departments during the lifecycle of that particular vehicle.
“It eliminates friction in the vehicle lifecycle and allows verification from all parties,” observed Justin Oesterle, CEO of RouteOne LLC. Using Blockchain as an electronic distributive ledger brings both transparency and trust to transactions, noted Lisa Chao, National Manager, Enterprise Cash Management & Treasury Operations at Toyota Financial Services. “Functions like funding and consumer transactions have the opportunity for more efficiency when they are used on the Blockchain distributive ledger,” she said.
The panelists noted that there are intellectual property concerns holding back widespread acceptance of Blockchain as companies are cautious in their thinking, especially about sharing information. “The pace of adoption is challenging because not everyone is there yet,” Osterle said. “But I would recommend that companies build a foundation now because it is coming.”
The subject of Blockchain and the impact on regulations and regulators also was discussed. “Get it right with regulators,” advised Kevin Point, Managing Director, Product Executive, Chase Auto Finance. “Define what it is in your company and what it is not. Using Blockchain for securitization could be coming soon.”
The art of convincing senior management to commit to investing in Blockchain was compared to using the same format and language as a business case pitch. “It involves education and not scaling too much too quickly,” Point advised. “Allow for check points and assessment at those check points in the process.”
February 6th, 2019 by Dan Bucherer