Axis Auto Finance is consistently on the search for new technology, especially instant decisioning, but Ilja Troitschanski, president of the company, said he, and others in subprime auto, are not yet comfortable with the tech, he told Auto Finance News.
“Especially in the subprime market, it’s not easy to implement new technologies,” Troitschanski said. “There has been a lot of talk about sort of automated underwriting and other fintech initiatives that could play a role in our market but I think it will take time to refine and get them to a level where they need to be, in order to be widely accepted in the market.”
The challenge with implementing technology, like automated decisioning, increases with the amount of risk the lender is taking on, he added.
The Canadian-based lender’s portfolio is nearly 100% subprime, and it’s an area that is underserved in the country, Troitschanski said. Still, it requires a greater level of scrutiny.
“What makes it more challenging is that in the subprime market the underwriter has to look fairly deep into the client’s credit situation in order to issue an approval,” he said. “It’s not solely based on the credit score, it’s based on going into the credit bureau; analyzing why there are issues; analyzing how those issues took place; analyzing how long they’ve been in the job; and all this other stuff that is detailed and it’s really difficult to automate.”
Separately, also noted that lead generation has helped the dealerships sell more cars, but sometimes it creates more work for lenders to create an appropriate closing rate.
“Ultimately, I think technology in our market is coming,” he said. “It’s inevitable, and we welcome it as long as it is tested, and as long as we are comfortable with what it does to our business.”
