The auto finance market is moving faster than expected for World Omni Financial Corp., which is why the lender is focusing much of its efforts in 2017 on data integration and utilizing analytics, said Alfredo Cateriano, vice president of risk management, data, and analytics.
“Our biggest challenge at World Omni, as within the data and analytics space in general, is approaching the optimal timing of execution,” Cateriano told AFN. “We are having to play catch up, trying to integrate the data, develop all of these analytical models, and make them operational. The market is moving faster than the time that we have available to do the things we need to do.”
World Omni Financial Corp. and subsidiary Southeast Toyota Finance celebrated their 35th anniversary last month, and the companies look to make a big technology push this year, with particular emphasis on meeting consumer preferences, President Dan Chait told AFN.
“We are investing a bit in IT to make sure we are interacting with our customers in the most flexible and most helpful way possible,” he said. “We are keeping an eye on the evolution of the retail process to make sure we continue to support dealers as [the industry] evolves.”
Cateriano, who joined the World Omni team on Sept. 1, looks to help the company expand on two projects.
“One is marketing analytics to gain a better understanding of digital preferences — mainly focusing on consumers’ behavior with their smartphones, which seem to be replacing tablets and laptop,” he said. “The other opportunity is enhancing our profit model, where one of the most important components is pricing optimization.”
Before joining World Omni, Cateriano served in various leadership positions at Ford Motor Credit Co., most recently as vice president and chief analytics officer. At Ford Credit, Cateriano oversaw analytics for commercial risk, consumer risk, funding support, operational risk, finance, treasury, and marketing and sales.
“World Omni understands that executive support is extremely important in the data and analytics journey,” Cateriano said. “There is so much we can do, but in order to really be successful, you have to have support from the top. So, it is great that World Omni is making these investments and sees value in what we are trying to accomplish.”
Cateriano spoke with AFN about World Omni’s priorities for 2017, risk and analytics projects in store, and his outlook on the auto finance industry.
Auto Finance News: What are your top priorities for 2017?
Alfredo Cateriano: Our main goal for 2017 is to develop a roadmap in terms of risk management, data, and analytics. We will also be focusing on data, statistical/econometric models, and people integration, for which we already have a few important initiatives underway. Recruitment will be another important factor. We are strengthening our relationships with local professors and universities, such as Florida Atlantic University, to find master’s and Ph.D. students with skillsets that complement our current team.
AFN: What is your outlook on credit performance in the auto finance industry?
AC: Better than expected, and I base that on anticipating a solid outlook for the U.S. economy, which — in conjunction with our models and optimization solutions — will help us to effectively serve our dealers and customers.
AFN: What is the status of World Omni’s e-contracting?
AC: World Omni has already launched e-contracting and the company is currently working with our dealers on implementation. As is expected, there are some who are supporting the idea very quickly, while some others require a bit more communication.
AFN: What innovative ideas do you hope to bring to the table?
AC: What we want to do is take the experimentation needed to the next level. We need to have the data, then we need to have the statistical and mathematical framework to constantly be testing hypotheses regarding customer preferences on programs, incentives, pricing, and so on. And we need to have a way to quickly deploy the new insight we receive. That way, each day an executive could determine what was done yesterday, what worked and what didn’t, and make the necessary changes.
AFN: What are your thoughts on longer term loans?
AC: I think that long-term loans are necessary, in the sense that, in the auto finance industry, monthly payments are very important. Right now, in an economy where the growth of wages has been minimal and the price of automobiles with new gadgets and innovations has gone up, the only way that you can maintain your monthly payments is by having longer terms. The only drawback I see is the cycle of car sales, and for us in the financing world, the increased risk from having those longer contracts on our books.