Toyota Financial Services has become the first automotive financial services provider to join financial innovation firm R3's consortium which is working with innovative “blockchain” technology on implementations for accounting applications in global financial markets.
The Toyota captive will be collaborating with over 50 of the world's largest financial institutions, including Goldman Sachs and Morgan Stanley, to develop commercial applications for the financial services industry that leverage the appropriate elements of distributed and shared ledger technology, said an R3 statement.
The R3 team of financial industry veterans, technologists and blockchain and cryptocurrency experts collaborate with consortium members on research, experimentation, design and engineering to help advance this technology to meet banking requirements for identity, privacy, security, scalability, interoperability and integration with legacy systems.
"Toyota Financial Services is excited to join the R3CEV consortium to advance the use of distributed ledger technology in finance. We believe this technology will ultimately lower costs, increase efficiency and make auto finance more transparent for our customers," said Chris Ballinger, the company’s CFO and global chief officer, strategic innovation (pictured above).
R3 recently unveiled Corda, its shared ledger platform specifically designed to record, manage and synchronise financial agreements between regulated financial institutions. It is heavily inspired by and captures the benefits of blockchain systems, without the design choices that make blockchains inappropriate for many banking scenarios, it said.
Blockchain building block
Ballinger hinted that the auto finance company is looking at ways to leverage blockchain technology outside of the current implementation in the financial services and auditing sphere.
"Beyond finance, we believe additional applications of the technology in auto manufacturing and sales will benefit our customers by making mobility more affordable and available. TFS welcomes the opportunity to contribute to the development and advancement of the R3 ecosystem," Ballinger said.
The online distributed ledger, which makes it easier for participants to track the ownership of an asset, could be applied to track auto parts as they move between countries and factories, he said. Down the road, blockchain could play a role enabling connected cars to communicate with drivers’ personal devices and sensors on infrastructure in cities and on roads.
“That’s fairly far out and extremely speculative,” Ballinger said, “But it’s important to get your toe in the water.”
Keeping more accurate records in real-time of the thousands of parts that go into building a typical car would make Toyota more efficient, he said. Such monitoring could also help during supply chain disruptions.
David Rutter, CEO of R3, commented: "We are delighted to welcome Toyota Financial Services to our ever-growing network of non-bank institutions. Distributed and shared ledger-inspired technology holds the potential to revolutionise the infrastructure used by all participants in financial markets, and we continue to diversify our member base to reflect the interests of firms across the sell- and buy-side."