Top Industry Innovators Aiming to Transform Auto Finance

Technology has transformed the way consumers want to shop and finance vehicles, and even how they want to communicate with companies. Fintech is no longer a buzzword from the world of payments and banking, and auto finance lenders are evolving with the times. Below is Auto Finance News’ annual list of Industry Innovators leading the charge.  [Listed in alphabetical order.]

Jim Bander, National Manager, Decision Science at Toyota Financial Services

This is an “interesting” year to be in technology, Jim Bander, national manager, decision science at Toyota Financial Services, told AFN. Its parent company, Toyota Motor Corp., launched a mobility company — Toyota Connected Inc. — in April 2016. The company is using connectivity and mobility to provide a mobility services platform for carsharing and ridesharing services. The subsidiary is also working with TFS to explore how financing can evolve to accommodate the changing landscape of mobility. “We have a partnership with Uber to try and provide the right financing products, to make sure Uber drivers continue to find Toyota and Lexus products favorable,” Bander said. “They are some of the favorite vehicles among Uber drivers who want to make sure there are flexible lease products.”

TFS also built a smart key box for a pilot with Getaround in San Francisco, he added. Carshare users can hook this smart key box onto their car, so that other drivers can share the car using their smartphone, Bander explained. “So, you lock and unlock the doors and start the engine [through the smartphone], so that while you’re at work, or during the weekend, you can share your car with other people,” he said. “We are looking to provide the right leasing products so that car sharing actually becomes a way of getting you into a financial product, and getting you into a vehicle.”

Steve Banfield, Chief Executive of BMW’s ReachNow

BMW North America LLC’s ReachNow mobility services program is working on a full suite of services: on-demand rideshare, car rentals for as long as five days, the company’s original short-term fleet rental service, and a residential shared-ownership model, Steve Banfield, the company’s chief executive told AFN. The full program is currently in a pilot in Seattle only, however, the company’s app for its carsharing services rolled out a “major software update” in April called ReachNow Fastlane. The update “radically improved how members reserve, unlock, and lock our cars,” Banfield said. “The average time it takes to reserve the car is now less than 10 seconds, and to unlock a car using our app is less than 5 seconds.”

ReachNow celebrated its first anniversary in early April, and now has 45,000 members using its services in its three markets. “It was a busy year, ReachNow expanded in Seattle twice, launched in Portland and Brooklyn, and introduced our ecosystem strategy at the LA Auto Show,” Banfield said. “Since then, we’ve been focused on building out the services in our ecosystem. In the weeks and months ahead, you’ll see us focusing on the member experience.”

Alfredo Cateriano, Vice President of Risk Management, Data, and Analytics at World Omni Financial Corp.

Alfredo Cateriano, vice president of risk management, data, and analytics, joined World Omni Financial Corp. in early September, and has been focused on data integration and utilizing analytics. In particular, Cateriano has set up a program to explore machine learning — a type of artificial intelligence that allows technology to learn without being programmed, he told AFN.

When it comes to machine learning in auto finance, “the train has already left the station,” he said, so lenders have to make a decision “to start running pretty fast later, or try to catch that train now.”

The company is also partnering with universities in Florida and utilizing Ph.D. candidates as part of its overall focus, Cateriano said. Through the program, students will utilize World Omni’s data to explore the use of machine learning, as well as data mining. “We try to tap into Ph.D. students that are usually in school for about five years,” he said. “You can bring them into this more complex, multi-year project. You can showcase your company to them, and then you can find out who are the right individuals that you would maybe like to pursue for full-time employment.”

Joy Falotico, Chief Executive of Ford Motor Credit Co.

Joy Falotico has worn many hats at Ford Motor Credit Co. since she joined the captive in 1989. Before being promoted to chief executive in August, she most recently served as COO for Ford Credit and as a vice president for parent Ford Motor Co., where she led the company’s marketing, sales and brand, and business center operations. Now, Falotico will lead the company during a “transformational time in the auto industry,” she told AFN.

“As Ford transitions to an automotive and a mobility company, I am excited about the opportunity for Ford Credit to continue to lead in providing products and services to our dealers and customers,” she said. “We are looking at mobility trends around the world and, as consumers think differently about the way they get from point A to point B, we see a lot of opportunities for new products and services.”

Ford Credit is working with Ford, as well as conducting its own research and experiments to address these trends, she added. “Some of our work revolves around how we can facilitate people’s use of multiple modes of transportation, new types of shared ownership, flexible payments, digital wallets and expanding online financing,” Falotico said. “The goal of all our efforts is to improve the consumer experience.”

David Hollodick, Senior Vice President of Consumer Vehicle Lending and Product Executive at Bank of America  

Bank of America began piloting a new online, direct lending platform in April, which is the bank’s “next step in our value proposition,” Hollodick told AFN. The program allows buyers to link financing to specific cars from local dealer inventories, calculate the value of trade-ins, and ultimately reduce time spent in the dealership.

The company launched the portal specifically to give consumers more control, the ability to conduct their own research, and understand what their options are, Hollodick said. “Today’s car shoppers desire greater transparency into the sales process, from model choices to financing options,” he added. “Our state-of-the-art mobile Internet tools provide the capability to deliver financing and sale options to consumers at lightning speed.”

Tony Nicolosi, President of Volvo Financial Services

Technology upgrades and, in particular e-contracting in leasing, is a priority for Volvo Financial Services this year, Tony Nicolosi, the captive’s president, told AFN. Last year, the company rolled out e-contracting on retail installment contracts, and is now in the process of developing a solution for its lease product, he said. “Our goal is to have a solution in e-contracting for leases by early 2018,” Nicolosi added. Our overall goal is to make life less complicated for our dealers and customers, and we believe going to e-contracting — the digitalization of the world — is the way to go. By the end of this year I believe we’ll have the majority of our dealer network on the e-contracting for retail and then the next solution for us is to go to lease down the road.”

Separately, the captive is developing 12- and 18-month lease products as a tool to bridge consumers between cars, Nicolosi said. “[Today] if you were within three months of the new model, I’d offer you a lease extension, no problem, but now I need something that gets me out 12 months,” he said. “I don’t see a huge take rate on it, but we don’t want to lose [the consumer]. We want to get them in the next car.”

Mark O’Donovan, Chief Executive of Chase Auto Finance

Mark O’Donovan — a 20-year Chase veteran — was named chief executive of auto finance by JPMorgan Chase & Co. in November. The bank has also been investing heavily in technology solutions, and launched Chase Auto Direct – a digital portal designed for customers to shop for a vehicle and secure financing online – in August. O’Donovan, it seems, is good fit to lead the bank’s fintech endeavors, as he is a firm believer that “technology is an enabler not a disruptor,” he told AFN.

“Good technology can facilitate a better customer experience, which is beneficial to the entire ecosystem: consumers, dealers and manufacturers,” he said.  “That’s why we are investing more than $9 billion a year in technology across JPMorgan Chase, and will continue to invest in Chase Auto Direct, our end-to-end car-buying service available on the Chase mobile app and on Chase.com.”

Tim Russi, President of Auto Finance at Ally Financial Inc.

Ally Financial Inc. launched a new branding for its multi-lender, digital-financing auto marketplace, called Clearlane, in April. Formerly known as BlueYield, which Ally acquired in August, Clearlane will still serve largely the same core functions as before — refinancing and direct-auto financing — but the look and feel is more inline with Ally’s “vision,” and emphasizes transparency in the buying process, Tim Russi, president of auto finance at Ally Financial, told AFN. There are “over a dozen” lenders participating on the platform beside Ally itself, but that number will change as Clearlane’s functions evolve, he told AFN at the time of launch. The goal is to on-board as small of a lender group as possible, and still accomplish a 90% fulfillment rate, he added.

“Imagine going to the Clearlane site, you could click on a link from a dealer’s site or a link from another lead aggregator. Our goal with Clearlane is we want to be where the point of sale is occurring,” he said. “If you think of the world, sales are going online and digital, we have to have the ability to be there — online and digital — when that sale is occurring, to derive the financing. I’m not saying we have it right, but I’m saying we’re getting out there, tracking the market place, improving the product, listening to our dealers and customers, and try to make sure we get the right answer out there as the marketplace evolves.”