As the captive gears up to be a part of next month’s Automotive Intelligence Summit, GM Financial recently expanded its commitment to Spring Labs, the company developing the Spring Protocol, a blockchain-based platform designed to transform how information and data are shared globally.
Spring Labs announced that GM Financial is a part of the company’s efforts to raise $23 million in Series A funding. The round was led by GreatPoint Ventures with significant participation from existing investors, including August Capital, as well as General Motors Ventures, the corporate venture capital arm of General Motors, RRE Ventures, Galaxy Digital, Multicoin Capital, The Pritzker Group and CardWorks.
“We’re pleased to announce our Series A with strong participation from existing and new strategic investors, enabling us to accelerate the development of new products as well as the Spring Protocol itself,” said Adam Jiwan, chief executive officer and co-founder of Spring Labs.
“Additionally, we’re excited to expand our relationship with GM Financial, which has demonstrated its commitment to innovation and collaboration over the past year, playing an active role in the evaluation of products and use cases on the Spring Protocol,” Jiwan continued.
Back in February, GM Financial announced its collaboration with Spring Labs as part of its Spring Founding Industry Partners (SFIP) Program, which is geared to drive improved data management standards to help address critical auto finance industry issues like identity verification and synthetic identity fraud.
Via the GM Ventures investment, GM Financial joins more than 20 other leading financial services institutions in co-developing the first applications to be built on the Spring Protocol — all part of the company’s continued effort to better serve and protect customers and dealers.
As other forms of credit mature and evolve, such as the adoption of chip-enabled credit cards, the companies pointed out that auto financing fraud has become a path of less resistance, having increased by a rate of nearly five times from 2011 to 2018. The companies estimated fraud-related losses in auto financing cost the industry between $4 and $6 billion per year, with a large portion of that fraud resulting from the abundance of synthetic identities, a form of fraud wherein identity thieves establish credit accounts using a mix of genuine and fake customer information, such as a real customer’s name, but a fake address.
As a result, the first products being built on the blockchain-based Spring Protocol are Spring Verify for enhanced identity verification, Spring Defense for fraud monitoring and mitigation, and Spring Protect for loan stacking prevention.
These products are designed to improve customer on-boarding processes by reducing costs while improving data availability, security and granularity. Spring Labs insisted its products will deliver valuable anonymous data to lenders in a variety of verticals, including unsecured consumer lending, small business lending, credit card issuance, secured auto lending and more.
“GM Financial is excited to deepen its relationship with Spring Labs, and we look forward to the launch of the Spring products as we believe they have the potential to better protect our customers from fraudulent activity,” GM Financial chief strategy officer Mike Kanarios said.
GM Financial likely will be discussed this investment and more when the captive appears during the Automotive Intelligence Summit (AIS), which runs from July 23-25 in Raleigh, N.C.
During a fireside chat titled, “Cybersecurity for the Future of Auto,” AIS attendees will discover the answers to the most pressing cybersecurity issues that the auto and auto finance industry are facing along with what cybersecurity technologies are receiving the most investment and why? AIS chair Bill Zadeits and Ryan Bachman, SVP and global chief information security officer at GM Financial, will explore the complexity and importance of the intersection of data privacy and cybersecurity.
More details about the Automotive Intelligence Summit can be found by going to www.autointelsummit.com.