Global Lending Services is in the midst of establishing a direct lending business, a move Chief Executive Steve Thibodeau calls “the next gear of [the company’s] growth engine.” While the Atlanta-based auto lender is keeping short-term aspirations in check — Thibodeau said he does not see the direct business as a significant driver of volume for the next year — he expects it to be a critical component to the long-term success of the organization.
“We see this as a growth engine for the future, and something we are beginning to invest in now,” Thibodeau said.
At the helm of the company, Thibodeau is zeroed in on growth — hiring 53 employees in June alone; developing the direct-to-consumer venture; bolstering the indirect platform by adding nearly
200 dealerships each month; and, overhauling the subprime lender’s decisioning process. With all of that on his plate, Thibodeau shared lessons learned from his 20-year auto finance career, top challenges on his radar, and what it takes to start a direct lending business. What follows is an edited version of Thibodeau’s conversation with AFE.
Auto Finance Excellence: How do you apply lessons learned from your tenure in the auto finance business to the evolving industry?
Steve Thibodeau: Never stop innovating. The market is constantly evolving. To stay ahead, we need to out-work, out-think and out-innovate the competition. Our competitive advantage is our ability to innovate new products that better meet the needs of the dealers and customers at a rate much faster than the rest of the market.
GLS was one of the first non-bank finance companies to offer 100% fully automated decisioning; we were one of the first to develop pass-through programs; and we were one of the first to allow customers the ability to prearrange financing through their mobile device. We are now leveraging all these learnings and capabilities to reinvent the direct-to-indirect purchase experience for the
nonprime market.
AFE: What spurred GLS to establish a direct-to-consumer lending business? How do you anticipate that business to develop in the next year?
ST: We have been studying the market and consumer behaviors for some time now. Like every other part of the economy, consumers are slowly migrating more towards online purchasing. At first, customers went online just for information. Then they began using the internet to locate vehicle inventory. Ultimately, it led to determining vehicle pricing, and now customers are starting to explore financing those transactions through prequalifying for loans before they head to the dealership. We want to be there for both the dealer and the consumer throughout the process, wherever and whenever they choose to explore their options.
We will begin testing a direct-to-indirect program in the fourth quarter with a pilot group of dealers in a test region. Our goal is to perfect the right dealer and customer experience through that pilot and ultimately roll out the program nationwide to all our dealers. We don’t have a hard timeline on the full rollout, other than to say we will move at the pace of demand from the market and
our dealers.
AFE: What operational and logistical changes did GLS put into place to support the new direct-to-consumer business venture?
ST: Customer attention spans are very short online. In just a few seconds, a pop-up or banner ad can distract customers and lead them to another site entirely. Lenders must deliver lightning-fast approvals and pricing on all the possible vehicle options to satisfy the demands of today’s customers. GLS has made significant investments into our decisioning infrastructure to be able to provide near-instantaneous decisions.
It’s also important to have a seamless customer experience. Consumers need to be able to effortlessly move from their approval online to a wallet of options to the dealership, and then be able to fly quickly through different vehicle options, terms, payments and so on.
Finally, there is a staffing component that must be solved. It’s important to have folks who can assist customers with the purchase experience, as well as navigate their different options. We need to service customers through their preferred communication style, whether that be phone, chat, text or email.
AFE: What are the top challenges on your radar, and how are you allocating your time?
ST: For me, it always comes down to focusing on talent, risk, growth and capital. I spend 90% of my time focused on these four key areas. Talent is by far the most important, since if you can solve talent the other three areas seem to take care of themselves.
I interview 10 to 15 candidates a month for various roles and look at 30 or 40 resumes or LinkedIn profiles. As a growing organization, we are flush with opportunities and are always looking to add talent to the team. We have a high bar for what we expect, and I am constantly amazed by the level of creativity and innovation throughout the business.
From a risk perspective, we are cognizant of the fact we are very late in the cycle. It’s something we talk a lot about as a leadership team, as well as at the board level. We have continued to focus on enhancing our decisioning capabilities by adding data sources and constantly monitoring our loss performance. As a lender, you can’t avoid a recession, but you can certainly position yourself to best weather the storm and emerge as a winner on the other side.
