Deutsche Bank and the German insurance group, Allianz have partnered with the car exchange, Auto1 GmbH under the umbrella, Auto1 Fintech to facilitate automobile financing using distributed ledger technology. Together, they will offer this solution as an option for car dealerships to refinance loans and to offer new insurance products to their customers. The company has launched the platform in Germany, and will open it up to Poland and France later in the year.
Auto1 is a used car exchange. The company buys used cars, then sells them to dealerships with the option to refinance their loans. Using blockchain technology, this entire process may now be automated in an immutable, distributed manner, rather than utilizing the old paper-based process that is slow, and which reduces liquidity by tying up capital for several weeks.
By offering faster, automated approvals and access to more capital, Auto1 Fintech believes that sales volume will increase. CEO Hakan Koc said, “We are freeing capital and our customers are more liquid as a result. It’s a win-win.”
In addition to increased sales volume derived from car dealerships, Auto1 Fintech hopes to increase customer loyalty through its various financing and insurance options. The company is based in Berlin, and is reported by Bloomberg to have a valuation of €2.9 billion. They have also had a €460 million investment from SoftBank Vision Fund in 2017. SoftBank is an international group of investment advisers who focus on the technology sector, including growing, disruptive and innovative businesses.
Deutsche Bank provides a number of services, including corporate and investment banking, asset management services, and wealth management. With the combination of their investment expertise, Allianz’s insurance experience and Auto1’s technology, we can expect to see further developments out of this project that match the disruptive mission of SoftBank Vision Fund.
Several other companies are also moving insurance and financing to the blockchain, and we can expect to see more B2B, as well as more direct-to-consumer options available as the technology continues to be adopted. Recently, Insurwave announced its plan to provide maritime insurance to the container shipping behemouth, Maersk, as a better way to track the supply chain of ocean freight cargo. Also on our radar is Samsung SDS, which just released its Nexfinance blockchain platform for fintech businesses. Their new Blockchain-as-a-Service (BaaS) platform includes a product that automates insurance claims, using smart contracts and other functionality. It has the capability to maintain the digital identities of users, and we would assume that Auto1 Fintech would need similar technology in order to verify and process insurance claims and payments.
There are numerous projects coming out of Germany. Recently, VPE opened its first German cryptocurrency exchange for institutional investors, while SAP launched a BaaS platform, similar to Samsung’s offering. Bitbond, an online bank in Germany began to use Bitcoin as a proxy for cross-border loans and the list goes on. With so many blockchain companies and projects sprouting up in Germany, we can expect the nation to become a hub for new technology, as partnerships between these companies make for faster development of new ideas.