In the evolving landscape of auto finance, there are tools and technologies increasingly available to help lenders become more operationally efficient, thereby allowing them to focus on growth, according to Scott Hendriks, product consultant at Fiserv Automotive Solutions.
Custom credit scoring, auto decisioning, and customer relationship management were just a few of the areas of focus Hendriks discussed during today’s Center for Auto Finance Excellence webinar entitled “Operations in Focus: A Roundtable on the Future of Auto Finance.”
Hendriks was joined by Guerin Senter, president of Western Funding Inc., for the webinar; the final in a series of four in 2014, presented by the Center for Auto Finance Excellence and sponsored by Fiserv.
With the auto lending sector facing intense regulatory scrutiny and challenges looming in 2015, Hendriks and Senter discussed what improvements auto lenders can make to the complete operational process.
Outsourcing where possible, especially tasks that are labor-intensive, can not only lessen staff and overhead, Hendriks said, but will allow companies to focus only on the areas they need to work on to foster growth. Try to find vendors that offer a la carte services, he said, with flexibility in staff levels for any given task, so that lenders only pay for what they need, when they need it. He also warned lenders that the quality of vendor management is the responsibility of the lender in the eyes of regulatory agencies, so be sure to choose 3rd party vendors with stringent management services.
Automated decisioning was also touched on by both speakers, and Senter shared that Western Funding had focused on improving its speed of decisioning in 2014, with a time of 15 seconds now possible through automated decisioning. Doing so manually, he said, previously took about 17 minutes per contract, which didn’t seem like a big deal when contract levels were low. However, since the company has grown from fewer than 100 deals a month early in the year to as many as 1,000 contracts this month, according to Senter, automated decisioning has become a necessity.
When asked which area of operations was ripe for change in 2015, Hendriks said that with an increase in volume of nonprime lending, there will be pressure to utilize non-traditional data, and how best to integrate that data into an effective, automated environment.
That non-traditional data will also be beneficial, he said, when going after the growing number of millennials with thin files. That group, he said, often has little other than credit card debt on their records, but when their buying power expands, lenders will need to look for non-traditional data in order to score them accordingly.
A complete recording of the webinar, with further advice and forecasts from both Hendriks and Senter, will soon be available on this site.
