Subprime lender Arivo Acceptance invested in digital verification technology to help mitigate origination risk during the COVID-19 pandemic, Chief Risk Officer Landon Starr said during the Auto Finance Risk Summit on Tuesday.
Sandy, Utah-based Arivo leaned on automated data acquisition to verify borrowers’ income and employment status, and thus their ability to repay, at the time of origination, Starr said.
“One of the big things to keep in mind is that what you originated during the COVID downturn, and those type of dynamics, is now what’s part of what’s performing in your portfolio — in the same way that what you originate now is going to be your portfolio performance in 12 to 18 months,” Starr said.
When it comes to focusing on what lenders can control, the originations pipeline is key, Starr explained.
“Making sure that we’re staying focused and being kind to our future selves through strong origination risk policy, to make sure we’re creating the portfolio that we want to see in the future … those are the kinds of things that are important to keep an eye on,” Starr said.
Arivo Acceptance, founded in 2017, has a managed portfolio of around $325 million as of March.