TFS’ Vipin Gupta: Digital now a way of life

[caption id="attachment_64441" align="alignright" width="178"] Vipin Gupta [/caption] When Vipin Gupta was named chief information officer at Toyota Financial Services in 2018, auto lenders could not have predicted how much digital lending would impact the industry in just a few short years. The COVID-19 pandemic in 2020 accelerated the industry’s online transformation, and now digital car-buying and financing are critical to lenders’ success. Currently, Gupta leads all aspects of the Dallas-based captive’s digital transformation and information technology. When he joined TFS, the captive had a portfolio of about $92 billion; as of yearend 2020, the lender boasts more than $100.4 billion in outstandings, according to the 2021 Big Wheels Auto Finance Data report. Gupta attributes the growth in large part to the captive’s focus on digital experiences for customers and dealer partners. “Digital is no more a new way of working; digital is now the way of working for most of our customers and for our dealers. It's a way of life now,” Gupta said. “Our customers and dealers want to interact with us where they want, when they want.” Auto Finance News recently spoke with Gupta about TFS’ digital transformation, the captive’s focus for the future and looming risks spurred by increased digital adoption across the industry. What follows is an edited transcript of the conversation. Auto Finance News : A year into the COVID-19 pandemic, how has Toyota Financial Service’s digital adoption strategy evolved in response to changing customer and dealer preferences? Vipin Gupta : We were already on a path for digital transformation, but the COVID crisis reinforced and accelerated our digital strategies and overall transformation that we have been going through. We will continue to focus on those strategies. We're going to focus on new ways of working, which will support the new hybrid flexible model. We will continue to focus and expand our private-label business platform. We will be heavily focused on automating and enhancing our digital experiences for our customers, our dealers and our team members. Our dealers and customers are now empowered to choose the way they want to do business with us because they are becoming more digitally savvy. They expect everything to be simple and seamless, efficient and responsive. There is a lot of focus around how we design more electronic documentation, e-signature capabilities, and more self-service capabilities. Our enhanced auto decisioning processing system now automatically makes credit approval decisions for two-thirds of our incoming contracts. Through this pandemic, our partnership with dealers has flourished because we were all collectively looking for solutions to serve the customer when customers wanted to interact with us in a more contactless fashion. Those are the kind of habits that are going to stay with us into the future. AFN: How has the shift to digital mobility finance impacted Mazda Financial Services, specifically? VG : We built from the ground up a new mobility finance-as-a-service system for Mazda Financial Services using cloud-based technologies, which has been extremely successful for us. Overall, the business has exceeded our expectations that we had for this partnership. The system allows Mazda dealers to complete electronic contracting in hours and fund vehicle contracts in days instead of weeks. More than 500 Mazda dealers benefit from retail financing, leasing, and protection product solutions offered through MFS. The captive is migrating legacy processes for its flagship lending arm and its luxury offshoot, Lexus Financial Services, to the new system, a process that will take two to three years. Instead of trying to upgrade a legacy system, we have an opportunity where we have a modern system, and we are upgrading the business onto this modern system — it is our platform of the future. AFN : In the next six months, where is TFS putting resources in terms of digital initiatives? VG : We will be focused on creating more automated and more self-service experiences. We have always talked about the concept of omnichannel, and I think the future is about “on my channel.” This is about providing our customers and dealers ways to do business with us on the channels of their choice, not just ours. That's going to be the new way of doing business. From a digital initiatives perspective, our focus is going to be really in the front of our business. It’s around this idea of: How do we become a more digitally native business for our customers and our dealers? We can reimagine how that interaction takes place between our dealers, our customers, and TFS. How do we make that process of buying car and financing car seamless? Speed and choice become an important element of doing that. We must do it in a way that it is contactless and so our customers don't have to even come to the dealership. It's all digital, and still dealers are making the sale and TFS is obviously benefiting from that. AFN : With increased digital adoption, what risks are top of mind? VG : Digital is not just happening within Toyota Financial Services, it’s happening across all our partners. A new kind of risk I think that we all need to be focused on is that there's more interconnectedness between different suppliers of IT — what I call the “digital and Information infrastructure supply chain.” Digital adoption has now created a supply chain and interdependencies between our partners. When we used to think about risk before, we used to think about what we call third-party risk — our software provider, cloud provider or hardware provider. Now, you think about fourth-party and fifth-party [risk], which is the suppliers to those suppliers. If one link in this chain breaks down, it's going to impact the experiences of our dealers and customers. To fix that, we need to know what the links are in the entire chain. We are mitigating it by putting new processes and policies in place so that we have a much broader transparency of all the different players that deliver these experiences to our dealers and customers.

TFS’ Vipin Gupta: Digital now a way of life

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