With the coronavirus pandemic changing the face of how companies do business, lenders are trying to find new, innovative approaches to help navigate the changing industry. Three trends are already making their mark on auto lending — mobile strategy, compliance management, and measuring performance — in facilitating greater convenience and efficiency for borrowers and lenders.
Mobile for anywhere, anytime loan origination
Consumers have come to expect mobile business transactions. They want to obtain vehicle financing, regardless of time or location. Whether they’re viewing a “must have” on the lot, finding a deal on Craigslist, or just planning for an eventual purchase, the expectation is that securing financing should be intuitive, convenient and accomplished in a matter of minutes.
A mobile experience that supports multiple browsers and devices presents the available financing programs, rates, and parameters in the borrower’s native language. Automation is key to origination efficiency, coordinating verification of borrower identity and employing other fraud detection capabilities to reduce risk. Fully-configurable decision rules and autostructuring algorithms instantiate credit policies and deliver decisions almost instantaneously, without requiring any underwriter intervention.
Once the loan has been funded, the same mobile application should allow the borrower to securely review payment information, update contact details, easily access supporting information and securely communicate with customer service throughout the life of the loan.
Build compliance into your process
The elegance of a well-designed mobile lending experience contrasts harshly with the complexity of the growing number of lending regulations. However, automation and cloud services are helping lenders implement compliant lending practices. Workflows ensure a consistent origination process, using credit decisioning rules that reflect current regulations.
Automated calls to cloud-based services ensure valid loan calculations based on current state and federal interest rate regulations. An automated approach to loan origination accelerates credit decisioning, provides an auditable process and greatly reduces the risk of noncompliance.
Measure performance with integrated analytics
Analytics maximize the inherent value of volumes of borrower and process data. When analytic capabilities are tightly integrated into a loan origination solution, lending professionals have immediate access to preconfigured reports tailored to their specific interests, without the need for database administrators or data scientists. Lending professionals easily create dashboards and modify reports to focus on lending performance metrics. Seasonal loan volumes, booked ratios, mobile response times, underwriter efficiency, reasons for declines, delinquencies and myriad other metrics provide immediate insight into the health of the business.
It’s clear that technology will continue to drive lending innovation. Ubiquitous mobile connectivity enables on-the-go loan origination and management. Cloud services allow lenders to incorporate additional lending functionality without the need for protracted and costly custom development. Integrated analytics give lending professionals access to relevant performance metrics for immediate business insight.
Shaimaa Elk serves as executive vice president, chief information officer and chief technology officer, and is responsible for all elements of product and technology development at defi SOLUTIONS, the technology partner of Auto Finance Excellence, a sister service of Auto Finance News.