The shift to digitization and embedded finance is a budding trend in the auto industry that gives companies the ability to understand consumers through data in a way that was never before possible.
Uber, for example, is issuing a private-label credit card and is using its collected data as an underwriting advantage, Shift Technologies’ co-CEO Toby Russell told Auto Finance News. “I think you’ll see a lot of partnerships with white-label corporate cards embedded in apps,” he predicted. “That’s the first easy way to execute on the concept of embedded finance.”
A direct line of insight between consumer and lender presents “underwriting data that is better than what the average bank issuing a credit card would have,” Russell said, noting CarMax, Carvana and Vroom are using their own consumer data to determine creditworthiness for their lending arms.
The newly available data allows a retailer “to know who the customer is in a way that they never could in the past, due to the new digital interaction,” Russell said. On the other hand, lenders are also benefiting from the shift to digitization through the use of online shopping and payment options, giving lenders a known user and identity behind the buyer, he said.
The combination of digitization and data analytics is “creating a tremendous transformation in the e-commerce space,” Russell added.