As lenders tap into opportunities driven by emerging technology, subprime lender Arivo Acceptance is developing software to streamline the digital experience for lenders, dealers and consumers.
“A lot of the opportunities [for technology] in indirect auto are about better partnerships with dealerships,” Landon Starr, chief risk and information officer at Arivo Acceptance, said at the recent Auto Finance Summit East 2023 in Nashville, Tenn. “Tying in online shopping and understanding cost and pricing from a credit perspective with the dealership inventory is a big opportunity still, which is one piece of software that we’re working on at Arivo.”
Lenders can link their finance offerings to dealerships’ inventory online and pre-approve consumers, creating a more seamless transition from online shopping to the dealership, Starr said.
“There’s a lot of companies out there trying to do that — where you’ve got online marketplaces and you’ve got the price of vehicles,” he said. “Then as you move over to the dealership world, there’s a disconnect and you start all over with a very traditional dealership interaction dynamic, where [the consumer] becomes a lead generation.”
AI for customer service
Artificial intelligence (AI) poses another opportunity for lenders to improve their customer servicing, Starr said. Chatbot technology, for example, “has come a long way,” and it can now answer more questions from consumers than ever, he said.
“Conversational AI has started to get really good, so [there are] a lot of opportunities for chatbots for operational efficiency,” Starr said. “As we start thinking about our chat bots and our chat-with-us functions … to be able to answer a consumer’s question without having to command airtime from a phone customer service associate is going to be a big opportunity for creating efficiencies from a servicing standpoint.”
Utilizing chat bots can help lenders save money when margins are already tight, Starr said.
“Particularly in the current economy, where cost of funds are up and we’re seeing a lot of pinch on some more profitability dynamics, finding ways to automate and facilitate servicing through chatbots and things of that nature are going to be a big opportunity in the years to come,” he said.
The Big Wheels Auto Finance Data 2023 report, the only tabulation of the top 200 auto lenders by outstandings, is available now.