TechSpotlight: Newsbytes: First Investors to Update Scoring Model

First Investors Financial Services in the process of developing its fourth-generation scoring model with Experian, according to a report from Kroll Bond Rating Agency Inc. (www.krollbondratings.com).

First Investors (www.fifsg.com) uses empirical models, developed over the course of the company’s 25-year history, to score the loans it underwrites. At least annually, the Houston-based company validates its scorecards for effectiveness; it updates both its custom and Fico scores quarterly, according to the Kroll report, which was issued in conjunction with First Investors’ January securitization. In addition, every two years First Investors validates its scorecard by reviewing loans that it had approved but were ultimately funded by other companies, as well as those that it had declined yet ultimately performed well.

First Investors has three scorecards ― one for customers with a prior bankruptcy; one for customers with a more established credit history, also known as “thick file”; and one for customers with a relatively short time in the credit bureaus or a credit history with few accounts, also known as “thin file,” according to the report.

First Investors offers indirect and direct lending, portfolio acquisitions, and third-party servicing. Its indirect lending arm serves dealerships in 37 states, making loans to consumers with credit scores between 500 and 650. First Investors was bought late last year by Aquiline Capital Partners LLC (www.aquiline-llc.com) for $100 million.

CUNA MUTUAL PREPS AUTO-BUYING APP
Using an app designed by CUNA Mutual Group, credit union members will be able to scan a vehicle identification number to learn basic information ― including average retail cost and EPA mileage estimates ― about new and used vehicles. Members can also use the tool, called AskAuto, to submit credit union loan applications.

AskAuto saves vehicle information, along with the member’s notes and ranking preferences, to allow for a comparison between vehicles before deciding to purchase. Using GPS technology, the app also gives credit unions the ability to send customized messages to members while still on a car dealer’s lot. These messages can provide members with guidance on the best loan available from their credit union, said Steve Hoke, director of loan growth products at CUNA Mutual (www.cunamutual.com) and product leader for AskAuto.

The technology employs CUNA Mutual’s loanliner.com product, which is used by more than 500 credit unions nationwide, according to the company. More than $600 million in loan requests have been submitted via CUNA Mutual’s smartphone loan technology since it debuted in June 2011, and 45% of smartphone loan applicants express interest in payment protection products, Hoke said.

Early adopter credit unions will begin to use AskAuto in March; the full release is scheduled for early summer.

ALLY FINANCIAL LAUNCHES CUSTOMER LOYALTY, DEALERSHIP TRAINING INITIATIVES
Ally Financial Inc. has unveiled improvements to two of its dealer-facing services, meant help dealers enhance sales and financing efficiency, plus the overall customer experience.

On April 1, Ally (www.ally.com) will launch its Relationship Management Center, a web-based interface that dealers can use to obtain leads and design customized marketing campaigns in an effort to manage customer loyalty and retention. The site provides access to materials for direct mail and email marketing campaigns with a few clicks of the mouse.

Earlier this month, Ally debuted its Performance Development Center, which offers an online education and training platform for dealership personnel. The center includes training recommendations tailored to specific job functions for franchise and independent dealers, plus access to on-demand courses on retail financing, leasing, and F&I management, among other topics. Last year, more than 12,000 dealership employees took part in Ally training courses. “Training is an extension of our indirect business model,” Ally Financial President Tim Russi said in a release.

ROUTEONE OPENS CHANNEL TO CONSUMERS WITH LENDINGTREE TIE-UP 
RouteOne and LendingTree Autos have teamed to create a car buying and financing site for consumers. Using thewww.lendingtreeautos.com site, consumers can make vehicle selections from local dealers’ inventories, estimate monthly payment information ― with the ability to adjust down payment and financing term ― and apply for financing. Meanwhile, dealers can access credit scores, trade-in valuations, estimated fees and taxes, and manage the application progress using their existing set of RouteOne (www.routeone.com) tools. They can also give consumers real-time application status information.

VAN WAGENEN AND SHAW SYSTEMS PARTNER ON SERVICING SOLUTION 
Houston-based Shaw Systems Associates Inc. (www.shawsystems.com) has integrated van Wagenen Financial Services’ lender-placed insurance products, collateral insurance tracking, and claims services into its servicing system software. Eden Prairie, Minn.-based van Wagenen (www.vanwagenen.com) plans to pursue similar agreements, said General Manager Randall Rempp.

MANHEIM SIMULCAST ON MOBILE WINS ‘PRODUCT LAUNCH OF THE YEAR’ AWARD
Manheim’s Simulcast on Mobile won the Product Launch of the Year award from the Technology Association of Georgia Product Management Society. The new product allows Manheim (www.manheim.com) customers to virtually bid and buy cars at its auctions via mobile device. Simulcast beta testing began last December, and the product was officially unveiled at the National Automobile Dealers Association convention in early February. It is currently available on Apple devices, with an Android launch slated for the spring.

―Marcie Belles & Nikki Mascali

Published in the March 2013 issue of Auto Finance News TechSpotlight, through the generous support of FIS.