SAN DIEGO — The driving factor behind Bank of America’s decision to build its new online, direct lending platform — rather than buy or partner with a third-party — was to maintain control, Duane Freeman, the bank’s national sales executive of consumer vehicle lending, said at Auto Finance Innovation 2017.
“Most other key competitors have a model where you have [four] interested parties in the workflow — the dealer, lender, customer, and then some third-party site or technology,” Freeman told attendees. “We felt by building it on our own, we could eliminate that fourth category. Now, you only have three interested groups that you have to care for.”
Eliminating the fourth category was “critical” for Bank of America, he said. “The challenge when you bring in a third-party provider with this transaction workflow, is you then may have to bend to their dealer network and their needs,” Freeman added. “Whereas with our process, we can go out and engage our dealers, build a value proposition, and drive traffic from our consumer channel directly to those dealers that support us.”
There is a narrative in the industry that “direct competes with indirect, and that’s not our philosophy,” he said. “Our philosophy is that they complement each other. We are very sensitive to how we build out and design our process and workflows, so that it cares for the needs of the customer and it cares for the needs of the dealer.”
Hear more from Freeman about investing in innovation and Bank of America’s new direct lending platform in the video below, the second in a six-part video series from Auto Finance Innovation 2017, held last month in San Diego:
