General Motors Financial has partnered with blockchain company Spring Labs to help reduce identity theft. It’s a move that could potentially save the car maker millions of dollars in fraud costs.
As CCN previously reported, 95% of carmakers expect to use blockchain technology in the next three years, but General Motors is leading the pack.
The partnership will see GM Financial, the finance branch of General Motors, join Spring Labs’ Spring Founding Industry Partners Program. The initiative is designed to advance the role of blockchain in data sharing.
This is a huge nod towards real-world adoption of blockchain technology.
Very excited to officially unveil our partnership with @gmfinancial, one of the largest global providers of auto financing with operations in North America, South America, and Asia. https://t.co/DQ3HPpslXf
— Spring Labs (@SpringLabsMain) February 11, 2019
Speaking to Forbes, GM Financial Chief Strategy Officer Mike Kanarios said he believes blockchain technology will deliver a “better, faster, and cheaper system” to identify fraud.
Solving a Million Dollar Problem
GM Financial is fighting a huge problem: synthetic identity fraud. It’s the fastest-growing form of identity theft in the US. Synthetic identity fraud is a process where someone blends various parts of people’s stolen data to create a new identity.
It’s effective and incredibly difficult to trace. By using synthetic identity fraud, an individual can take out multiple credit cards or a loan on a car.
“As the captive finance arm for General Motors and one of the world’s largest auto finance providers, we are continually innovating and evolving our fraud prevention and detection capabilities to better serve and protect our customers and dealers.” GM Financial Chief Strategy Officer Mike Kanarios.
GM Financial is responsible for issuing loans, finance, and leasing options. It has a presence in North America, South America, and Asia. The company is a huge target for fraudsters and it reportedly loses millions of dollars per year fighting identity theft.
General Motors isn’t just selling small-ticket items. If a fraudster buys a car, it can be almost impossible to track them down to reclaim the money. Blockchain technology could help identify and verify individuals before they are approved for a car loan.
Spring Labs: Raised $15 million to Kickstart Blockchain Adoption
Spring Labs is a blockchain startup that has already raised $15 million in seed money. It is developing the Spring Protocol, a blockchain-based network which allows companies to share data and information privately. The protocol ensures the underlying source of data is never revealed.
To spur growth, Spring Labs launched the Spring Founding Industry Partners Program. It has so far invited a handful of FinTech startups to work together on research and development of its technology.
“We are excited to partner with GM Financial to create solutions on our developing network to address vexing economic problems such as identity fraud.” Adam Jiwan, CEO of Spring Labs.
The ultimate goal is to get companies to share information via the Spring Protocol. By doing so, they can spot and stamp out cases of identity fraud.
General Motors Leading the Charge in Blockchain
General Motors is one of the few Fortune 500 companies taking meaningful steps in blockchain adoption. GM Financial is also a member of the Hyperledger project, an initiative designed to drive real-world blockchain solutions.
62% of auto execs agree that blockchain will shake up the industry within three years, but it might be here sooner than they think.