The key to closing the gap and establishing trust between dealers and lenders is technology, said Theodore Papailion, director of value engineering at eOriginal, during a webinar called “How to Enhance Vehicle Finance Processes and Operations” hosted by eOriginal.
The paper process during a transaction is a challenge lenders face in the space, because up to 3% of all loans initiated tend to not get booked, which would lead to “additional work” and “loss in revenue,” Papailion said.
Therefore, a digital transaction management tool proves important, according to Georgine Muntz, chief operations officer at Defi Solutions. For example, during the origination process, a fully-digital process will combine the electronic documents, the electronic signature, the metadata, and the proof of compliance together in a “compliant and smooth fashion,” she said.
During the post-origination process, Papailion added, a digital transaction management tool will help lenders expedite movement to secondary market and increase capital options.
“Lenders are most focused on making sure they get the right quality loan and they price it properly for risk,” Muntz said. “They have to have a secured application process.”
In the meantime, a digital transaction will benefit the customers as well as the dealers by improving efficiency and saving time. Speed is a top concern Millennials have when getting in and out of a dealership, she explained, and dealers always look to bring in additional inventories, make additional sales, and create a faster funding cycle in a shorter period of time.
However, as technology develops, it is hard for us nowadays to predict what transaction types will emerge in the future, and thus finding a good technology partner is critical.
“What is great today is not going to be great in two years,” Muntz said. “So I am always finding leaders who can lead innovation.”
