As on-demand streaming services like Netflix and Spotify transform the expectations of digital consumers, auto lenders will need to “respond quickly” when it comes to funding requirements, Christer Holloman, chief executive and co-founder of Divido, told attendees at the International Auto Finance Network conference in London.
“Consumers want things straightaway, they have little brand loyalty, and they are very wary about how they’re going to spend their money,” Holloman said. “I believe this is opening the floodgates for disruption.”
Digital services like Spotify, Netflix, Amazon Prime, and even Uber are teaching consumers to “not hang around; they can get what they want,” Holloman said. The finance industry is being disrupted by this increasing requirement to provide new, innovative digital services, she added.
Divido, for example, is poised to secure partnerships with Ford Motor Co. and Volkswagen, after inking a deal with BMW Financial Services U.K. less than a year ago, David Backshall, Divido’s commercial director, told Auto Finance News back in April.
The financial services platform pairs consumers with lenders to offer financing for unexpected repair costs following vehicle servicing. The financing ranges from six-month terms to 12-month terms, depending on the lender. Self-driving vehicles will be more technologically sophisticated, and repair costs will likely be costly, which is why Divido is in a good position to offer financing for consumers, Backshall previously said.
“There is a new range of finance companies entering this world that no one has heard of before,” Holloman told attendees at IAFN. Even Facebook is making moves into the mobile payments market, Holloman said. The industry is also seeing disruption from new entrants such as FordPay and the Chinese startup Alipay.
For more content like this, check out the 17th annual Auto Finance Summit, which will take place on Oct. 25-27 at the Wynn Las Vegas. To learn more about this year’s event — or to register — visit the Summit’s homepage here.
Check out the full video below on how digital services are disrupting auto finance relationships:
