Why lenders must prioritize technology over perfection 

Prior to the pandemic, executives in the auto finance industry were starting to embrace innovative cloud and software-as-a-solution (SaaS) technologies, implementing digital transformation and adopting agile principles as part of their strategies. The onset of the pandemic forced auto finance leaders to accept and embrace these new business models at an accelerated rate. 

Despite this, it is no secret that the secured finance market, including automotive finance, remains fragmented between legacy and modern technologies.  

Many providers serve multiple lines of business that cross traditionally siloed technology domains. Historically, IT project onboardings and implementations for finance organizations could take a year or more; going live with new software or a new release was done in-person, onsite. Executives made investments with the expectation that technology would be up to date or in use as-is for a long time, even as it became more apparent that the world was entering the digital era. Managing data became more of a burden, with in-house models running a constant risk of mismanaging or losing data, human error or compliance issues. 

Now, it is expected that business requirements may evolve from month to month and that both executive leadership and technology must be flexible around these needs –a complex deliverable for leadership in even the largest auto finance organizations. 

Developments in the quality and support of SaaS integrations mean that auto lenders can now continue to evolve their tech stack and upgrade their capabilities more easily than in the past. Executives can investigate integrating new innovative technologies that span predictive analytics, artificial intelligence (AI), machine learning and deep learning. These are becoming not only available to the world, but also rapidly accessible to organizations of all sizes. To make things easier, by leveraging the cloud to make use of these technologies, organizations are plugging into their existing architecture and are exempt from having to make a significant investment to pilot a solution.  

In an Amazon-dominated world, speed and ease of service are important aspects of providing excellent value to auto customers. Organizations will struggle to leverage complex technologies without high-quality data processing and analysis. 

To prepare for future opportunities, leaders should invest in a secure foundation to build data-handling capabilities, including integrations enabling fine-tuned data management, cleansing, optimization and analysis at all stages of the customer journey. The critical goals should be maximizing efficiency, ensuring the ability to enter new markets and measuring success quickly while keeping up to date with regulatory changes and trends. This is not only to ensure survival in a crisis, but to enable a pivot-and-respond approach to evolving customer sentiments and new opportunities. 

Without adequate technology to process and analyze data in real time — and the ability to pivot for changing customer needs — even auto finance leaders who have successfully endured the challenges of the COVID-19 pandemic will quickly find themselves outmatched by more technologically capable competitors that have the ability to leverage data faster and more efficiently. Flexibility, a progressive outlook and a data-driven focus are the values that will mark best in auto finance leadership in 2022 and beyond. 

Progress over perfection is the mindset of a truly agile organization. Leaders in auto finance should not become complacent after reaching significant milestones. To stay ahead of the pack, executives should actively seek new ways to integrate the latest technologies and look ahead as to what comes next.  

Ray Wizbowski is the chief marketing officer at Solifi.