JPMorgan’s Automotive Subsidiary Taps Blockchain Technology for Vehicle Tracking
Chase Auto, the car financing subsidiary of JPMorgan Chase, the largest bank in the United States, has submitted a patent application to use a blockchain-based system in tracking the inventory offered to its car dealers, thereby eliminating any inefficiencies in auditing a car dealer’s inventory, reports Pymnts, November 24, 2019.
Inventory on the Blockchain
Reportedly, the application is a blockchain version of floorplan lending, which will enable car dealers to take loans against their retail inventory.
Also, JPMorgan aims to use the new application to eliminate inefficiencies that are often associated with auditing a dealer’s inventory by linking a car’s vehicle identification number (VIN) to the blockchain and it firmly believes that the use of the innovative technology will bring about substantial cost savings over time since there are millions of new and used cars that are part of the floorplan lines of credit.
Revealing more functionality of the application, Kevin Point, head of research and development at Chase Auto, described the floorplan lending process as a way of carrying out physical checks on all the inventory on a dealership’s lots, periodically.
“That means that a human being actually travels to the dealership, identifies the vehicles and then reconciles that inventory, if the loan’s outstanding, on both the dealer’s and the bank’s accounting system,”
DLT Pilot in Progress
Notably, Christine Moy, blockchain lead at JPMorgan, has revealed that a pilot of the system is already in progress, and it is being carried out with dealership partners.
Moy also noted that JPMorgan is engaging in talks with automakers about the yet-to-be-launched system.
Explaining how the use of blockchain technology will be beneficial to the system, Moy noted that it helps to prevent double flooring.
“This is when accidentally (or fraudulently) a dealership may pledge one vehicle as collateral for one floorplan contract to one bank, but also pledge the same collateral for another floorplan contract with another bank,”
As such, not only is JPMorgan and Chase Auto seeking to solve its own problem, they are also looking to add value to the vehicular and equipment industry at as a whole, Moy added.
JPMorgan is one of several banks around the world that has been actively exploring the potential of DLT and the bank has shown a rekindled interest in blockchain since CEO Jamie Dimon tendered an apology for labeling Bitcoin as a fraud.
Notably, the multi-national company became the first U.S. bank to develop a blockchain-based digital currency JPM Coin to be used to facilitate SWIFT payments between its institutional clients.
On April 22, 2019, BTCManager informed that JPMorgan is hatching plans to revolutionize the payments ecosystem with blockchain technology.