The second wave: Axis Auto president takes pandemic lessons to heart

[caption id="attachment_80835" align="alignright" width="192"] Ilja Troitschanski [/caption] Much of the world is dealing with another wave of widespread coronavirus cases. For auto lenders, that means facing more loan assistance requests and potential shutdowns. Canada-based Axis Auto Finance , for one, is leaning on lessons learned when the COVID-19 pandemic first hit the country. Canada had 769,246 COVID-19 cases as of Jan. 28, with more than 205,000 new cases reported in January, according to Johns Hopkins University . Axis prioritized cash flow when the pandemic hit and focused on propping up customers, President Ilja Troitschanski told Auto Finance News . For the first quarter of fiscal 2021, ending Sept. 30, Axis logged a 47% year-over-year increase in originations to $28.3 million, $16.6 million through a partnership with Westlake Financial Services . Troitschanski said the lender’s position during the first wave prepared Axis for another round of rising cases. What follows is an edited version of his conversation with AFN . Auto Finance News: How did Axis help customers when the pandemic started, and what do assistance programs look like now? Ilja Troitschanski: There are two things that are very different in this situation, versus other issues that our customers face in the lifecycle of our loans. Their inability to pay was not caused by the customer, number one. Number two is that it was completely unprecedented, and nobody knew how it was going to play out, how long it was going to last, and what the lasting effect on the customer’s credit would be. We came up with deferral programs for customer payments that would ensure that our customers do not get penalized in respect to their credit scores because of their inability to pay their bills. After the first wave, the number of requests for deferrals basically went away. We’ve had months where we had no requests. We’re in the middle of a fairly severe second wave, which is, in a lot of cases, worse than the first one was. We’ve got lockdowns being announced here on an almost a bi-weekly basis. We are now looking at what is required in this second wave. We’re getting some customer requests, not on mass yet, but that might change. A big difference now is we’re ready. We know exactly how it plays out. We have the software solutions, the technology solutions in place to roll out those programs when we must. AFN: How will secondary lockdowns impact Axis’ performance in the coming months? IT: I think, given everything we’ve learned, we’re in a really good position. The lockdowns are just now coming into effect. There was a big lockdown announced at the end of December in Ontario, there’s a lockdown in Quebec that was announced in December. If you look across Canada, what’s difficult to say is how these lockdowns will affect origination volumes, because obviously dealers are affected. Not only from the way they’re allowed to operate, but also from a consumer confidence perspective, and people just deferring or changing their plans in terms of purchasing vehicles. But either way, I think we are in a good situation to go through that next phase until hopefully the vaccine rollout is complete or at a point where it is it can start positively affecting the situation. AFN: Many auto lenders tightened credit standards during the pandemic. How is Axis responding to current economic conditions? IT: We’re managing that on a weekly basis because the situation evolves so quickly. If the government is shutting down a certain branch of the economy — restaurants or hospitality — then we must make sure that whoever we underwrite ultimately can pay their bills. With the technological advancements we rolled out in the last 18 months, we can react quickly and adjust so that we don’t compromise our volumes too much and keep the portfolio safe. We also are careful not to change too much, because as a lender you want to be consistent in how you underwrite. We want to make sure that we are fair and work with the dealer in situations where we can issue an approval. AFN: How did existing technology help Axis support dealers during the pandemic? IT: Touchless execution of documents, e-signatures, things of that nature, streamline the process for the dealer and allow for a touchless execution of contracts. All of those tools are, of course, continuing and we’re keeping them in place. We already had requests from dealers in affected jurisdictions that are stating that they’ll work with us because other lenders might not be offering those tools. We always want to be at the forefront of the leading edge of technology. The fact that we’ve been consistently successful in rolling out these technology tools, I think that helps us a lot. There’ll be a lot more dealer-focused tools that we’ll be rolling out in the next few months. If there is a shift in the industry as a whole, it’s more digital, more innovation, more technology, and we certainly go in lockstep with that. AFN: How has the pandemic shifted Axis’ operations? IT: We had to adapt to the work-from-home environment, and we had a contingency plan in place, even before the pandemic, for people to work from home. That’s why we were able to mobilize the entire workforce to work from home within 48 hours when those regulations first came into effect. We’ve got a lot more experience with the way people perform outside of the office, and we’ve rolled out evaluation tools that allow us to track that performance to make sure that we keep efficiencies where they need to be, even though people are not physically here. Ultimately, when you look at the efficiencies that are there today, with that work-from-home approach, I think some of those trends are here to stay. We’ll be able to utilize — maybe not all, but certainly some — of that approach going forward, even when COVID is behind us. This feature originally appeared in the February issue of Auto Finance News , available here . Auto Finance Innovation Summit, the premier event for technology in auto finance, returns March 16-17, 2021, as a virtual experience. The virtual experience will offer the quality networking and education of past events, all through an online platform. To learn more about the 2021 event and register, visit www.AutoFinanceInnovation.com .

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