As chief risk officer at Tricolor Auto Acceptance, Nick Brown has a unique opportunity to reach borrowers who may otherwise fall through the auto finance cracks.
Tricolor focuses on providing credit to thin- and no-file Hispanic consumers in the United States who wouldn’t qualify for credit with more traditional lenders. The lender uses machine learning to better measure a borrowers’ risk factors by looking at behavioral economic trends and other external data sources.
Tricolor is currently prioritizing investments in its artificial intelligence technology and geographic expansion efforts to further its mission, Brown told Auto Finance Excellence. Earlier this year, Tricolor Auto launched Tricolor Financial, a software-as-a-service venture that uses the company’s propriety artificial intelligence-powered technology to help other businesses offer fair loan terms to customers without a traditional credit history.
“Our number one priority continues to be looking for opportunities to help expand access to affordable cars and affordable auto financing for the Hispanic population in the U.S.,” Brown said.
Brown joined Tricolor in January 2021 after spending five years as chief risk officer at OnDeck Capital. He also held risk and management roles in his five years at the Commonwealth Bank of Australia and spent a twelve-year tenure in various roles at Discover Financial Services, MBNA, and CapitalOne.
Auto Finance Excellence asked Brown five questions to learn about his mission with Tricolor, top-of-mind lending trends, and a surprising personal fact his colleagues may not know about him.
Auto Finance Excellence: What are your company goals in about 10 words or less?
Nick Brown: Expanding access to affordable auto financing for the Hispanic population.
AFE: What is your favorite piece of leadership advice you ever received?
NB: It’s been consistent from all the great leaders and mentors that I’ve had throughout my career — play to your strengths and surround yourself with people who compliment you, as opposed to people who are your clones.
If I think about how I build teams, or how I evaluate when I’m looking to replace somebody who has moved on to a new opportunity, I’m always looking for personality, experience and skills that add something incremental to what already exists. So, if I’m strong in strategy and horrible at project management, I want a project management-oriented person in the leadership team who is going to be a big add on.
AFE: Who has had the biggest influence on your career?
NB: I’ve been fortunate to have great leaders and mentors throughout my career, and it would be hard to pinpoint one person who was the most instrumental.
Probably, it would be the first person who seduced me away from academia into the industry in the first place. Because without that departure 25 to 30 years ago, I wouldn’t have had all the fun experiences that I’ve had.
AFE: What do you think is the most underrated lending trend?
NB: There’s an under appreciation for how impactful the democratization of capital access and affordable analytic capabilities is going to be in increasing and changing competition over the years.
We’re certainly seeing that in multiple markets and multiple asset classes. I don’t think people understand, except for those who are in it day to day, how much that has changed. If you go back 15 to 20 years, you had to use very expensive mainframes, and very specialized skill sets, to do even the most rudimentary model.
Today, cloud computing and the access to things that have made modeling statistics and data science accessible to the masses has opened up the field. Increasingly good analytics and modeling are going to be table stakes. It also opens up to a whole series of new entrants. That’s not to say experience and deep data history aren’t still hugely important intellectual assets, but on a relative basis, it’s opening up things quite a bit.
Over the last 20 to 25 years, analytics and data have become a source of competitive differentiation, in the same way that cheap funding, or low cost of capital, or economies of scale, or extensive brand investment would be. Data and analytics have become equivalent in terms of their importance as assets to your business.
To build that competency and capability used to be very expensive. The barrier to entry on computational power, analytic horsepower and access to the data has been going down over time. It’s a fundamental secular trend that’s changing the landscape. If you are not in it, you may not appreciate how big of a change it’s been.
AFE: What is something your employees would be surprised to learn about you?
NB: I spend much of my free time in woodworking. It’s not something that I necessarily talk a lot about, and it is not necessarily something that a lot of people who sit in front of a computer all day spend their free time doing or are good at. But it has been a passion of mine for the last 20 years and it is probably the number one activity that I spend my free time doing.
I make wood carvings, as long as it isn’t purely aesthetic and has some form of function. A wood carving that you are just going to sit in a room wouldn’t be something I would necessarily do unless you were also using it as an end table. I like to have something that provides more than just aesthetic utility, but with a focus on aesthetic utility, craftsmanship and materials.
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