CPS Eyes Dealer-Based Tech to Bolster Origination Volume, Customer Experience

Subprime lender Consumer Portfolio Services Inc. is allocating funds toward its dealership portal and artificial intelligence as it looks to boost origination volume without sacrificing credit quality, Senior Vice President of Originations Teri Robinson told Auto Finance News.

“We don’t compete as aggressively, we focus a lot on customer service and try to be the lender the dealers want to work with,” Robinson said. To that end, the lender — with a $2.3 billion portfolio as of Sept. 30, 2018 — focuses on boosting dealer self-service options, with a revamped portal expected to go live this quarter.

Robinson spoke with AFN about her focus on dealer-based technology, why personnel changes are where she allocates most of her time, how fraud and rising interest rates are her top concerns for 2019, and her thoughts on diversity as a female executive in the industry.

What follows is an edited version of Robinson’s conversation with AFN.

AFN: What strategies are you implementing to bolster originations?

TR: We’re going to continue to find ways to diversify into other markets to increase originations. With the rollout of our new scorecard, we’re going to look for pockets of credit where we can expand strategically without jeopardizing portfolio performance. We’re also going to put in a dealer portal, so dealers have the ability to change cars and structures without waiting for a credit analyst.

AFN: What lessons do you take from your 20-year tenure at CPS, and how do you apply those lessons to the changing auto finance business today?

TR: As a company, we do not believe in sacrificing credit quality to compete with other lenders. We’ve been in business for almost 28 years, and we’ve been successful because we buy what we want to buy, and we don’t get caught up in what everyone else is doing. I can’t think just about my funding goals. Our servicing department needs to be able to collect on the loans, so I need to consider origination volume and collectability. Because we don’t compete as aggressively, we focus a lot on customer service and try to be the lender the dealers want to work with.

Our credit analysts, funders, and sales reps work hard to establish positive relationships with the dealers and the ‘shout outs’ they get from the dealers prove they’re doing a great job.

AFN: What was it like navigating origination volume during and after the Great Recession?

TR: Navigating origination during the Great Recession was extremely difficult. We had to drastically change our program to limit how much paper we could buy. We had to lay off a lot of the origination staff or reassign them to the collection department. Coming out of the recession, we focused on customer service more than ever before. Growing after the recession was a slow process, so we wanted to be sure we gave the dealers the best customer service possible. We tried hard to put deals together that worked for both the dealer and CPS. Whenever possible, we said ‘new offer’ instead of ‘no.’

AFN: What are the top challenges on your radar, and where are you allocating most of your time?

TR: Personnel is always a challenge. Finding the right person for our unique positions can be tough. Staffing properly to compensate for attrition without overstaffing and increasing operating costs can be tricky. The time it takes to train the staff so that they’re really confident and productive is a long process. Hiring, training, and continuous education are things I focus on all year. Additionally, processing a funding package is still a labor-intensive process. This year I’ll be working on ways to streamline this process for the right applicants. The new scorecard will help me with that.

AFN: How is CPS using new technologies?

TR: We’re currently using alternative data to help us capture more deals, but we’ll be exploring other kinds of alternative data and artificial intelligence to help us buy more strategically and fund faster. The one strategy we’ll stick with is making customer service a priority. The dealer portal is something we’re definitely going to implement this year. It will make it very easy for the dealers to work their deals when a credit analyst isn’t immediately available or the company is closed.

AFN: What do you think is the biggest concern the industry is facing in 2019?

TR: Interest rates can be a concern, because when the cost of funds increases, profit margins shrink — especially when some lenders are forced to approve lower interest rates to compete. Fraud is still a concern. Producing a fake document is easy. Gone are the days of cut and paste. Now you can buy a paystub or bank statement or utility bill online. They can be hard to detect.

AFN: As a top female executive, what advice would you give the industry to embrace more diversity with C-suite positions?

TR: I recently traveled to all of our branches and held a women empowerment talk for our female employees. I told them my story of moving up in the company. It was very different in the beginning — 28 years ago — but it’s much easier these days. Generally speaking, women are hard workers, creative, smart, and dedicated. Those are the characteristics of a good leader. A company whose leaders include men and women will benefit from a variety of ideas and will encourage all employees, not just the men, to work harder, knowing advancement is available to anyone.