The auto finance industry is entering a period of compressed margins, rising fraud exposure and shrinking back-office capacity.
The gap between the volume of documents lenders must review and the number of analysts available to review them continues to widen. At the same time, fraud techniques have become more sophisticated, more automated and more difficult to detect manually.
Across more than 12 million loan originations and 2 billion data points processed by Informed, one trend is clear. The lenders adopting AI-driven verification early are outperforming peers in accuracy, speed and audit readiness. The institutions that modernize now will set the benchmark for 2026.
Scale matters, but what matters more is what executives decide to do next.
Three decisions auto finance executives must make before 2026
1. Shift from manual document review to documentary intelligence:
Fraud has outpaced traditional verification. Paystubs and bank statements can now be edited with AI tools that recreate fonts, alignments and metadata with precision. Many fraudulent documents pass the human eye test and even pass some legacy fraud tools.
Documentary intelligence narrows this gap by analyzing patterns across millions of documents, identifying template families, detecting manipulated transactions and providing clear, auditable explanations behind each decision.
Executives should ask:
- How many fraudulent documents did we miss this quarter;
- How much analyst time sits inside manual review; and
- Can we defend our verification decisions in a regulatory exam.
If any answer is unclear, documentary intelligence must move to the top of the 2026 roadmap.
2. Reduce reliance on stips with non-documentary validation:
Stipulations remain one of the most expensive bottlenecks in auto finance. They slow funding, frustrate dealers and create inconsistent decisioning. Lenders often keep them in place because they lack confidence in alternatives.
Models powered by 80 million historical loan outcomes and 1.5 billion data points now validate income strength, employment stability and fraud likelihood without requiring any documents. This reduces backlogs, speeds approvals, improves pull-through rates and restores consistency across underwriting teams.
Executives should evaluate:
- Where predictive validation can safely eliminate stips;
- How funding speed would improve without manual bottlenecks; and
- Where borrower friction can be reduced while improving capture rates.
A nondocumentary framework can rewrite the economics of underwriting.
3. Prepare for a future where QC and audits are fully automated
Securitization pools and regulatory exams demand verifiable, repeatable logic behind every credit decision. Manual sampling is no longer enough. Analysts cannot scale to the volume and complexity required.
Reprocessing entire loan populations with AI enables complete audit files with standardized calculations, consistent income validation and full decision trails across thousands of contracts in minutes. This level of transparency is becoming a requirement.
Executives should confirm:
- Can we produce full calculation trails on demand;
- Can we demonstrate consistent decisions for similar borrowers; and
- Do we have the ability to revalidate entire portfolios without adding staff.
Automated QC is becoming a competitive advantage.
Leadership mandate for 2026: Build AI-ready verification systems
The debate about whether AI belongs in underwriting is over. The focus now shifts to how quickly lenders can build durable verification systems that strengthen governance, protect portfolios and improve funding speed.
The lenders that outperform next year will:
- Replace manual workflows with AI agents for verification and fraud detection;
- Reduce dependency on stips with predictive validation;
- Implement documentary intelligence as standard practice; and
- Adopt automated QC as part of audit readiness.
The industry is entering a new era. Leaders who modernize now will set the pace for everyone else.
Jessica Gonzalez is the vice president of customer success at Informed.IQ and has more than 15 years’ experience in the financial services industry, including tenures at Santander Consumer USA and Visa.
Content sponsored by Informed.IQ
