General Motors veers on the Blockchain to limit fraud

Spring labs is a company operating in the sector Blockchain which saw the light during the 2017. From the office of Los Angeles Branches committed to transforming the storage and distribution of financial information are branching out, with the aim of helping companies in the sector to combat inefficiencies, distortions and fraud. The company aims in particular to create a real revolution for sensitive traffic, using decentralized security features for this purpose.

In the first round of financing open to investors, Spring Labs obtained 32 million dollarsi, most of which come from General Motors. The Fintech company revealed the data in a press release which aroused considerable curiosity, precisely in consideration of the involvement of one of the giants of the global automotive sector.

Why does General Motors care about Blockchain?

Of course, analysts immediately began to question the meaning of the operation, to understand its possible implications. Remembering in particular the fact that Spring Labs is developing a work thanks to which one could become possible significant reduction in fraud which is now customary in financing related to the purchase of cars. The scams linked to the loans in question are an increasingly widespread phenomenon in the United States, which in the last decade has even quadrupled up to severely test the supply chain that allows you to apply for funding directly in the chosen dealership.

Among the most common ones there is the simultaneous request for more loans in different contexts making it impossible for companies to reply due to the fact that the databases are not crossed, in addition to the cloning of known companies using their data in order to request financing and then to lose their tracks once the scam has gone through.

To understand the dimensions of the phenomenon, just remember how based on the latest available estimates losses to the sector through these systems are between 4 and 6 billions of dollars in the period between the 2011 and the 2018. A situation that is now out of control and that has pushed General Motors to try to put an end, also in consideration of the fact that the automotive sector without the credit lever could literally jam, increasing the stock of unsold in the squares of the dealerships.

The Spring Labs system: how does it work?

The system developed by Spring Labs was therefore identified by General Motors as the ideal response capable of deflating the phenomenon of fraud related to car dealership loans.

In fact, it goes to use Blockchain technology in order to be able to provide the parties involved with them information on the actual credit situation of those who are requesting a loan, thus carrying out the function that is performed in the Italian credit system by the SIC, Credit Information System. It should also be stressed that the Spring Labs system makes it possible to obtain information completely anonymous, thus preserving the privacy profiles that are now a craze for consumers.

The statements of General Motors

Has been Mike Kanarios, GM's director of strategy, commenting on the company's decision to join Spring Labs as a partner, explaining how the stars and stripes automotive giant is one of the largest providers of financial services for the automotive sectorrole that drives him to continuous innovation aimed in particular at identifying and preventing fraud with the evident aim of being able to better serve and protect customers and distributors. An intent that could be significantly favored by the collaboration undertaken with the Californian company, whose system promises to prove decisive in the battle waged against the scammers that are raging in the sector.

The importance of the battle waged by General Motors

The battle waged by GM is not only important for the US automotive sector, but for the global financial system. The US car loan market is indeed a $ 1.170 billion deal at the end of 2017, with growth of even 70% from the lows that followed the bursting of the Subprime Mortgage bubble.
The numbers in question have been mentioned by Federal Reserve in a relationship dedicated to business which has seen an unprecedented surge in the last decade, which has drawn its lifeblood precisely from the granting of important loans. The consequence of all this was not only the inflating of the indebtedness of American families to levels well above the peak recorded in 2008, with more than 7 million Americans who have reached a serious level of arrears in the payment of the installments of their auto, more than 90 days, but also an increasingly massive trend towards fraud, made easier by the huge mass of money that circulates around the sale of cars.

A very large dish, but which is likely to prove indigestible for companies that manufacture and sell cars. Precisely for this reason General Motors has decided to engage in a battle with results that are still uncertain, but which is likely to explode with far-reaching consequences, if the outcome were inauspicious.