Technological advancements continue to take the industry by storm as lenders upgrade their online capabilities and ditch legacy systems to meet consumer needs. As the shift toward digitization continued through 2021, new tech was implemented across banks, captives, credit unions and independent financiers alike to keep up with the ever-changing industry.
Here are Auto Finance News’ five most-read technology stories of 2021:
Consumer car-buying habits have changed amid the pandemic and more consumers demand online options. Wells Fargo Auto partnered with AutoFi to enhance its digital capabilities and reach more customers. Through the fintech, Wells Fargo streamlined its ability to offer real-time credit approvals, vehicle selection and financing online. Wells Fargo in early 2021 indicated that it would look to increase its vehicle loan automation.
Axos Bank entered the world of direct lending through its partnership with Carvana. Through the program, the bank’s direct loan applicants are redirected to Carvana’s website to find a vehicle from its inventory of more than 16,000 units. The online used vehicle retailer also has a similar partnership with Regions Bank, which launched in 2019.
In one of the largest overhauls to a lender’s tech infrastructure, Toyota Financial Services indicated earlier in the year that it plans to replace its legacy system with the cloud-based platform that it created for its private-label partnership for Mazda North America, a process that will likely take two to three years. TFS has since rolled out the platform in its private label financing partnership with Great American Outdoors Group in its first entry into the powersports finance market.
Cars are now digitally capable of handling consumer purchases. Visa and Daimler teamed up to offer users the ability to make payments from the comfort of their own vehicles, eliminating the need to use a cellphone for transaction authentication. The technology is embedded into the car’s infotainment unit and can be used at gas stations, restaurants or service stations. In-vehicle payments have also been adopted by General Motors, Ford Motor Co., Mercedes Benz, BMW, Honda and Jaguar Land Rover.
As electric vehicles (EV) continue to gain traction in the industry, Hyundai Motor America launched the test version of its subscription service, Evolve+, to further increase the adoption of EVs. Its captive, Hyundai Capital America, was charged with managing payments. Through an application, consumers can select a vehicle, schedule a pickup, manage their subscription and schedule the return of the vehicle. The program is designed to allow consumers to adapt to EVs without committing to ownership, and could serve as a precursor for other lenders to increase EV adoption or bolster product offerings.