siliconindia | | OCTOBER 20228IN FOCUSIn supply chain finance, usually banks do not have visibility of sale of vehicle by dealers, the corresponding on-time payment, or usage of the same amount to other purposes. This is an exceptional case study of a large Indian bank leveraging a vin-based solution on block chain for automobile financing to fully prevent fraudulent sale reporting by dealers.BUSINESS CONTEXTFor an average of 25,000 cars financed by the bank, there are huge stakes involved to the tune of $20M in recovery. Every month the bank representatives would go to the dealerships, manually inspect the stock and the payment made against the loan. With the current process, the bank couldn't track individual vehicles which possessed credit risk in a multi finance scenario and had no single view of all stock and sales. Due to inadequate visibility, the bank could not track usage of funds by Dealer. The repayments were applied on first-in-first-out basis, instead of the order of vehicles sold, resulting in faulty ageing analysis.THE APPROACH & SOLUTIONTech Mahindra demonstrated use cases that could be applied to business, infra and security teams of the bank to better manage end to end financing process. Usage of block chain for scalability, with an architecture that ensured no data leakage were justified for a solution of choice With this, Tech Mahindra began to assess the dealers financial health and focus on credit quality, with VIN as unique identifier to track vehicles from the manufacturer to the dealer, and to the sale. The Vehicle Information Number (VIN)-based data from all participants was stored on Block chain ­ Hyper ledger v1.4, with the node set up in the client's premises. The next phase was focused on integration with legacy systems and other external parties like Road Transport Authorities and Insurance agencies. IN FOCUSA CASE OF BLOCK CHAIN POWERED FINANCING IN AUTOMOBILE INDUSTRY
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