Innovate Auto Finance: Lenders Need to Balance Their Ground Forces With Data

LAS VEGAS — As the auto finance industry evolves — and as data becomes more refined and easier to use — it’s important for lenders to consider input from their consumer-facing staff, versus relying solely on data and analytics when making business decisions, said Scott France, vice president of Innovate Auto Finance and president of Loan Portfolio Servicing and CapRock Auto Remarketing.

“There is no doubt the auto finance business is better off today than it was 30 years ago, however, it is much more complex,” France told attendees at the 2016 Auto Finance Summit. “The question that I would pose to you, is how well do you listen to what your ground forces are telling you? Are your organizations so focused on models and analytics that what your customers are telling you is irrelevant?”

In most cases, over half the staff of any subprime auto finance institution is in the customer care area, France said. “If you add the loan originations and sales teams that deal directly with the dealers — and the remarketing teams that deal with the auctions — I would think that 65% of the organization is customer facing. The other 35% of the organization is made of support groups, such as IT, risk management, compliance, human resources, and accounting.”

However, most of the people that are in the trenches with the customers are left out of the decision-making process, France added. It’s important for lenders to balance the input of their teams that deal with customers on a daily basis, with the data being provided by the analysts and accountants — particularly when it comes to modeling forecasts, he said.

To that end, there are several actionable steps lenders can take to balance more input from their representatives, including:

• Meeting regularly with customer care, remarketing, and sales representatives or paper buyers to get their perspective on what is happening with the customer base.
• Scheduling regular meetings between their budgeting, pricing, and risk management analysts with their customer care representatives or paper buyers, in order to get their input on variables that may be beneficial in modeling forecasts.
• Scheduling regular meetings between their analysts and asset-remarketing representatives to talk about the value of reconditioning vehicles and remarketing strategies.

The people in an organization “are our greatest resources,” France said. “You can have the most accurate data, the best information, and the smartest MBA’s in the industry, but your business lifeline is totally dependent on those people that are [customer facing].”