Deutsche Bank Applies the Blockchain to BtoB Car Financing
The German insurance group Allianz and Deutsche Bank are designing a Blockchain-based car financing offer with help from the leading European marketplace for second-hand vehicles, Auto1. This partnership leads them to introduce a new entity: “Auto1 FinTech”. Their goal is to feature insurance and financing products for car dealerships when they buy their vehicles via Auto1.
Auto1 was launched in 2012 to exclusively address the market for commercial used vehicles: buying these from individual customers and selling them to car dealerships. These dealers can also sell their own used vehicles and be proposed trade-in offers.
This platform is currently active in Germany but plans launches in France and Poland, as well. They achieve €1.5 billion per year in revenue, with roughly 3,000 cars sold/purchased each day. In 2017, they traded more than 420,000 used vehicles (+40% compared to 2016).
Their new start-up, Auto1 FinTech, will propose Blockchain-based car financing and insurance services; meaning that payment and financing confirmations will be recorded using a Blockchain. Car dealers will then be able to refinance their purchases instantly, shifting away from a time-consuming paper-based process where funds were frozen for several weeks. Since this capital is not tied up in equity, car dealers could be encouraged to increase their orders. Auto1 expects this new Blockchain platform to help them diversify their offers and secure their customers' loyalty, while allowing for more flexible processes.
Comments – The car industry now used to Blockchain technology
Earlier this year, SoftBank invested €460 million in Auto1 (Source: Cointelegraph), lifting its valuation to roughly €3 billion. This start-up grew fast and became one of the youngest non-listed European “unicorns”.
Several car manufacturers have already implemented Blockchain technology for their services. Daimler (Mercedes-Benz) introduced a rewards program for eco-drivers where environmentally conscious driving habits earn them “MobiCOIN” later to be redeemed. BMW, GM, Ford and Renault are also behind the Mobility Open Blockchain Initiative (MOBI), to jointly craft possible Blockchain applications for mobility-oriented ecosystems.