Dealer rewards programs offered by banks or lending companies help incentivize car dealerships to finance their customers’ purchases through the lender offering rewards. Rewards are usually based on meeting lending goals or performance benchmarks, and range from bonus points for each loan or lease origination to reaching a certain loan volume each quarter.
AI-driven software identifies dealers who provide clean deals, do not overstate income and deliver low fraud rates. Best-in-class software adds attributes to create a dealer scorecard and enable fast funding based on that scorecard.
Some example attributes AI software can identify include:
- Dealer propensity to submit “clean deals” or deals without defects;
- Top dealer performance based on straight-through processing;
- Propensity to over- or understate income;
- Dealer aggregation and metrics over Informed’s contributory database;
- Income divergence; and
- Risky bank statements.
Using data attributes improves client risk-rating models, reduces false positives with machine learning-based detection models and improves investigation productivity. This results in outcomes with smarter search algorithms and better data visualization and management. This means the lender can provide faster funding to dealers, without any increase in risk, resulting in happier dealers and lenders.
Look for software that enables fast funding through event-based review cycles for low-risk dealers ensuring automated due diligence in compliance with risk and regulatory requirements. This also removes redundant checks and excess quality assurance and control (QA/QC), reducing defensive suspicious-activity reports (SARs).
Low risk, high rewards
When a dealer is considered low risk, Informed provides the opportunity to fund deals that potentially may be missing or defective but can be addressed after the dealer is funded. Automation speeds up defect identification and allows for queue optimization, speeding up the time to fund while remaining compliant. AI software also can assist in providing data to automate cure letters or back-office support functions such as title, repossession or SCRA.
Well-trained AI/ML software is designed to offer dealers faster funding as well as streamline and automate data collection and document handling for KYC and customer-due-diligence procedures. Lenders can provide dealers tools as a part of their dealer rewards incentives such as CollectIQ by Informed.
Incentivizing dealers with tools can eliminate unnecessary activities and provide more intelligent decision making, while fostering long-term partnerships. Offering added loyalty benefits helps differentiate lenders from competitors, increases customer satisfaction and, ultimately, drives sales and profits.
Dealer reward programs can be integrated into a dealer relationship management system and even tied to a vehicle brand or model. The ultimate goals of a dealer rewards program are to:
- Build strong relationships between lenders and dealers;
- Increase market share; and
- Provide added benefits for dealerships using the lender’s financing services.
A dealer reward program provided by a lender is a win-win for both parties. The lender builds strong relationships with dealerships and increases market share and the dealership benefits from the rewards and incentives offered through the program.
Jessica Gonzalez is the director of lending strategies at Informed.IQ and has more than 15 years’ experience in the financial services industry, including tenures at Santander Consumer USA and Visa.