One of the leading providers of financial services for automobiles in the US – BMW Group Financial Services has announced in a press release a partnership with blockchain startup, Bloom. The collaboration aims to streamline BMW’s lending offering while improving the overall customer experience; this partnership came out of the BMW Collaboration Lab 2018, a 10-week program that seeks to enable startups to trial their products at scale. The participating startups will benefit from networking with industry experts and will receive mentorship from BMW Group Financial Services leadership team, as well as gain access to funding.
Bloom has developed a system based on an end-to-end protocol for identity management, credit risk assessment, and credit scoring. This system is built entirely on distributed ledger technologies. BMW hopes that its partnership with Bloom will allow it to leverage this technology for verifying customer identity and the accuracy of credit history without needing to store the raw data of customers on servers.
According to Anne Ching, Head of Partnerships at Bloom:
“Bloom is excited to participate in such a forward-thinking initiative. I’m excited to be working with the BMW Financial Services team to build a streamlined and easy lending experience to improve the customer journey.”
How does Bloom work?
The Bloom mobile app is based on the Ethereum blockchain structure and takes advantage of a major blockchain feature – public-private key encryption. This encryption technique allows individuals to securely store data on their local device and apply for credit without the repercussion of data risks. Bloom also allows its users to create their own secured unified blockchain identity for accessing decentralized application (dApp) services around the world.
Conventional lending processes present many problems, aside from data risks. For instance, it is quite challenging for lenders to create a user-friendly credit application process as well as to accurately measure a borrower’s credit risk level. Bloom attempts to address these problems providing borrowers with a blockchain mobile app that uses a straightforward onboarding process and simplified blockchain architecture allowing virtually anyone (regardless of knowledge or skill level) to use blockchain technology to apply for financing. BMW intends to take advantage of this approach in an effort to remodel the traditional credit application methods used by individuals.
Ian Smith, CEO of BMW Group Financial Services USA stated that:
“[BMW is] looking to examine any and all methods of how blockchain ledgers could support the transformation of current data warehousing, payment, and customer information tracking. Ultimately, our goal is to enable BMW to automate a lot of processing and increase the tracking and security of information.”
BMW Collaboration Lab
Bloom is not the only participant in the BMW Collaboration Lab as five other startups (carLABS, Supermoney, Omniscience, Motion Auto Insurance, and Wrisk USA) have also been selected to participate in the 10-week acceleration program. The program is focused on tackling 4 key categories, namely:
- Building a blockchain strategy
- Digitalizing the customer journey
- Data analytics and insights
With regards to blockchain technology development, the multinational auto giant has stated that they are “looking to examine any and all methods of how blockchain ledgers could support the transformation of current data warehousing, payment and customer information tracking.” Ultimately, the goal of this endeavor will be to help BMW discover innovative approaches for increasing the tracking and security of information and automating many of the company’s processes.
The BMW Collaboration Lab is not the company’s first blockchain initiative. The German automaker has also been experimenting with blockchain to improve its supply chain process. One of these pilot projects leverages the distributed ledger technology to track cobalt sourcing to ensure the company only gets clean cobalt for its car batteries.