Oh, the stuff you don’t know….
The son of a close family friend graduated from college this past weekend. I was fortunate to be part of their celebration which included a smorgasbord, liquid refreshments, tears of joy, and lots of laughs. It was a great time. When walking by the table of the congratulatory gifts, cards and stuff, I noticed that one of the gifts was a book called “Oh, the S*** You Don’t Know!” by Antonio Carter.
I picked up the book and started to read it and giggled along with all the words of wisdom. It covered a few of the more typical daily life lessons like taxes, work and relationships. After a good laugh, I put the book down and went back to mingling and catching up with old friends. As the day went on my mind kept drifting back to the title of the book, “Oh, the S*** You Don’t Know!” The book ended as expected with the life lesson that you are not done learning as long as you are open to it.
The next day was a wet and rainy day. A good day to stay inside and get caught up on work. I started to going through some of my unread work emails and got caught up on reading some of the trade magazines that have been piling up on my desk. One of the articles that caught my eye was in the Funding Source Issue of the Monitor Daily, a trade magazine focused on the equipment finance industry. The article was called “Blockchain: The Next Big Thing For Equipment Finance?” by Keith B. Letourneau and Stephen T. Whelan. I had never of heard blockchain or maybe it just wasn’t registering. I quickly realized that I was a couple years behind the learning curve. Oh, the stuff I don’t know….
So what is blockchain and what does it have to do with the equipment finance industry?
Blockchain technology is a shared ledger used for recording the history of transactions or contracts. Once recorded the transaction within the chain cannot be altered. Some feel that blockchain can be or will be as disruptive and impactful as the Internet.
The reported benefits of blockchain technology include:
- Reduced fraud risk: an altered transaction brakes the chain and becomes invalid
- Eliminates the need for intermediaries
- Reduces the amount of paper needed to complete a transaction
- Reduces the complexity
- Increases efficiency in how transactions are recorded
Many experts feel that the financial industry will greatly benefit from the continuing development of the shared ledger approach because it has the potential to reduce the time, the costs and complexity of recording financial transactions. With the increasing use of electronic documents, changing tax laws, and the new lease accounting regulations, any technology that can help reduce costs, reduce risk and shorten close times will be very welcomed.
Admittedly I am a newbie to the topic and I have a lot of learning to do, but blockchain technology has piqued my interest. At Technology Finance Partners our specialty is financial sales execution. And if there is a technology that can make the financial transaction process simpler, more efficient, and safer, then we will be early adopters. I will work with my colleagues to explore ways that blockchain technology might improve the overall financial transaction process.
Areas that could be positively impacted by the new technology include:
- Improving the overall IT procurement process
- Simplifying the financing documentation process, including
- Simplifying the transfer of ownership
- The possible elimination or need for separate documentation for certificates of incumbency and proof of insurance
- Shortening the credit approval process
- Streamlining the processes for pay-per-use programs, on-demand acquisition models and other non-traditional acquisition models.
I am glad that I stumbled on to the article on blockchain technology.
“Knowledge will find you just when you need it if you remain open and rise to receive it.”
Note: I purposely didn’t spend a lot of time on “how” blockchain technology works because I am still learning about it myself. I was, however, able to find a lot of good information on the Internet. There are multiple Ted Talks and many of tech companies, financial institutions, and consulting firms have online sites and several blogs dedicated to blockchain technology.
Oh, the stuff we don’t know. Fabulous isn’t it?