The Center for Data Innovation spoke with Shane Bigelow, CEO of CHAMP, a U.S. company that provides digital titles for vehicles. Bigelow discussed the benefits of digital title and registration services and the opportunities for state governments to overcome barriers to digitalization by using software as a service.
This interview has been edited for length and clarity.
Daniel Castro: What are some of the advantages of digital titles over paper titles?
Shane Bigelow: For enterprises and consumers, the big problem is that paper often leads to higher expense, slower processing times, and greater number of errors. And data security is reduced, so the risk to the PII for the consumer is real.
When lenders have to deal with a title at the end of a loan in paper, or insurance carriers have to deal with a title on a total loss, or the retailers are trying to get a title for a consumer on a car that they’ve bought or sold, the expense associated with doing so doesn’t hurt the lender, the carrier, or the retailer, it gets passed through to the consumer.
If you digitize the process, the consumer’s costs drop. In fact, when we work with insurance companies, one thing they’re very clear about as the cost savings that we obtained for them, passes directly through to premium savings for consumers. The big thing for consumers to worry about is the expense that’s associated with a paper process.
Castro: How do government agencies benefit from digital title and registration services?
Bigelow: In government, for years modernization efforts have been on the docket. In fact, if you look across government in the last 10 years, it’s really difficult to find any governor that didn’t have DMV improvements, of some sort, on their top 10 list of things they want to accomplish. Unfortunately, it’s difficult to accomplish improvements when you’re causing people to wait in line, pursue a paper process, and deal with the associated delays. So, for government, the big win is that you take government out of the way of consumers or business. You make a digital process that is much more secure, much faster, much cheaper, can be handled from your iPhone, and you increase the quality of life for your constituents. After all, government is here to serve us, not us to serve the government. So this is a great way for the government to give back to the consumer and enterprise constituents that they have.
Castro: What are the barriers to digitization in state DMVs, and how can states overcome them?
Bigelow: One of the barriers was at the federal level, and the Department of Transportation did every state a favor when they allowed for the odometer disclosure statement to be made digital. Removing that one piece of federal paper that was in every title transaction and allowing it to be digital opened up the floodgates for every state to digitize title and registration. In fact, you could make the argument that states were appropriately spending taxpayer dollars when they weren’t doing the upgrade, when ultimately there was still a federal piece of paper that had to be handled in physical form. Because if there’s one piece, there might as well be five.
The first thing is that states should take advantage of this moment. The Department of Transportation did us all a favor in making that change. The second thing that governments should contemplate is that title and registration upgrades—moving from paper to digital—doesn’t require some massive modernization projects to make it happen. In fact, you can upgrade just those components. The concept that has always been in government for the last couple of decades is: If I want to change anything, I need to buy a huge system, I need to pay a massive upfront fee, I need to have a budget to do that, and then I have to be able to handle the maintenance fee with some sort of transactional charges that I accrue every time I process something. Well, SaaS, or Software as a Service, has wildly changed that. Government can take these services, whether it’s moving a title, storing a title, transferring a title, or registration, and turn it into a SaaS service. Those are available in the marketplace, and there’s no cost to government. It’s literally taking a paper process and moving it to digital, and allowing that transaction charge that they were going to charge anyway, to fall in part to the entity that is providing the technology.
Castro: How do you address concerns about security, including system outages or ransomware attacks?
Bigelow: The fallacy is the belief that paper is somehow secure. There are title vaulting companies that store paper titles in physical warehouses where there’s 60+ million pieces of information that, frankly, probably wouldn’t be that hard to get into. Second, when you’re using paper, you have to mail things around. Not hard for criminals. Criminals have, ever since the post office existed, figured out how to infiltrate mail to acquire personally identifiable information.
That attacks can occur through technology certainly should be a concern. We’ve seen attacks that have impacted government. But the nice thing about title and registration is that for the vast majority of states, the information that’s being moved around is, in many cases, already public. Most states have a service for $2 to $5 that anybody can pay to acquire the vehicle information, the owner information, and the like. Well, that’s what’s on your title. So you’re not actually moving around data that isn’t otherwise acquirable. Traditionally, hackers aren’t going after things that are already essentially in the public domain, they’re going after things that are not in the public domain. Title and registration information, you have to know where to look, but it’s largely available.
The first thing is the concern in this particular space is probably a little bit overblown, given the access to information in the public domain. The second thing is that if you use the right advanced technologies, like blockchain, a lot of your cryptography can be improved to a level that currently isn’t hackable by normalized systems that exist in the in the computer technology space. The glory of SaaS is that you as the customer never have to worry about upgrading. When we all started using Netflix, we had to worry about whether or not we ordered a DVD or a Blu-ray DVD. We as the customer had to worry about what we were receiving. But now with Netflix, we don’t worry about how they upgrade their service to get the movies faster to us in 4K. It’s the same with DMV technologies. When a DMV moves to SaaS, they are now allowing the best bleeding-edge technology to consistently be provided to them at the same price that they might have had with prior technology. Just like Netflix.
Castro: Vehicles titles seem like an ideal application for blockchain. Yet getting 50 states to agree on a decentralized solution might be an insurmountable obstacle. Is the future of digital titles blockchain or something else?
Bigelow: My joke is that the 10th Amendment is my best friend and my worst enemy. It gave states rights, which allows for 51 jurisdictions—all the states plus DC—to create their own system. So that’s a market opportunity for anyone in technology. You can ask anyone in any company in the space, they’re sort of glad there isn’t a federal system. As a taxpayer, I wish there was a federal system because it is something that could be federal. However, I believe in state’s rights, I believe in the 10th amendment and all the other protections it provides so the duplication that states have from place to place is an acceptable taxpayer expense in my view because it protects so many other of our rights and privileges.
That all said, your question was about would there be a 50-state adoption of a decentralized system like blockchain? I think that the potential is there, but it probably exists in the same way that it was created in credit, or in insurance information, or in in business information. Think Experian, Equifax, TransUnion, LexisNexis, Dun & Bradstreet. All of those entities have 50 state data. They have national data that is aggregated in what they’re doing. Now, I’m not sure of their use of blockchain. I would certainly encourage it to increase the cryptography because we’ve seen the hacking that has occurred at several of those places. But if you’re a private enterprise, and you are able to create that type of solution across a number of users, what you’re doing is you’re creating a dataset that’s better for the users that are paying to use it.
That is a more likely path for this information to be aggregated and available for the country. I don’t think it gets solved by the federal government. And I don’t want it to be solved by the federal government because the implications of what that means for the 10th Amendment. But I also think that states are unlikely to come together to create the solution on their own. What we need is private enterprise to be able to create a solution that mimics what we’ve seen created in other big data depots like credit, insurance information, and business information.