Automotive finance lenders have been feeling the impacts of COVID-19 on day-to-day business operations. Call duration is up. Resources remain stretched. And while lenders prioritize calls with concerned customers, insurance carriers wait on hold, delaying what is already a time-consuming total loss process.
Historically, crises have propelled innovation and changed how businesses operate. Some responded to the moment, emerging as leaders and pacesetters for their industries. Others had trouble adapting to a consumer base ready for change.
Those who are ready to embrace digital and lead through innovation will be better prepared for what’s to come. Here are three easy steps lenders can take now improve total loss efficiency, drive faster resolutions and improve customer satisfaction.
1. Digitize the total loss process
Total loss resolution has long been a cause of delays for automotive lenders, and the administrative burden is only getting worse as total loss percentages increase.
The process may involve chasing paperwork, countless phone calls and lengthy back-and-forth with insurance carriers. And while lenders and carriers work their way through this often manual, multi-touch workflow, consumers grow more frustrated waiting for resolution so they can move on with a new vehicle purchase.
As remote work becomes the norm for many, businesses and consumers will continue to rely on technology to keep them connected and productive. Digital tools that can deliver scale will create more efficient interactions and improve customer experiences.
Some lenders have turned to customer interaction solutions like chatbots to streamline workflows and better manage call volume. However, lender total loss workflows are sometimes inconsistent with how the rest of the collections department operates, and many still rely mainly on phone- and paper-based processes.
Digitizing the total loss process can make it easier to receive required documents: valuation reports, police reports, photos, etc. It can also enable electronic upload of letters of guarantee for fast, automated sharing. By eliminating paperwork, lenders can minimize the number of touches and calls per file.
Digital payment processing could further simplify total loss resolution. Paper checks take more time and lack the convenience of digital. They can also be sent to the wrong location, cost more and require secure storage (which can add additional expenses). Real-time ACH payoffs can not only reduce costs and human error but also help lenders quickly settle existing loans so they can start engaging in new loan conversations with consumers.
2. Integrate with insurance carriers
Technology can help reduce time spent on the title release process, providing more availability for customer support. But it can be difficult to understand which technologies to implement and the best way to do so, especially when multiple entities are responsible for providing a quality experience.
The challenge is finding a secure way to simplify information exchange between automotive finance lenders and insurance carriers. The two parties depend on each other to quickly resolve total loss claims, a process that takes an average of 73.7 days from loss to salvage — 62 of which take place post-valuation. Delays from either party could extend cycle time and delay loan payoff.
But with digital processes, lenders and carriers can connect electronically to reduce friction and fast-track total loss resolution. Freed-up resources can then be reallocated to helping serve customer needs rather than phone calls between the parties to secure lien release information or follow up on valuation reports and other requisite information. And the benefits can extend beyond simplified document sharing.
For example, auto lenders may not receive notice of a total loss until days or weeks after an incident. Occasionally, they don’t even find out until vehicle payments become delinquent. This causes immediate delays to the claims process and can have a negative impact on the customer experience.
By connecting with insurance carriers on a single digital platform, lenders can receive near real-time alerts when a financed vehicle is declared a total loss, minimizing the likelihood of missed payments while consumers wait on settlements.
3. Consolidate total loss workflows
Automotive lenders receive information through a variety of channels. Total loss notification could come from the consumer or insurance carrier. Valuation reports may be received through fax while letters of guarantee are sent through email. With so many moving parts across multiple channels, it’s easy to lose track of vital documentation.
But by leveraging a single, automated workflow, lenders can limit paper trails and transition away from emails, fax systems and phone calls. And with a centralized workflow for seamless delivery of relevant documents, lenders can more quickly move through the total loss process.
Having a centralized workflow also makes it easier for lenders to track claim progress. Real-time status alerts keep them updated throughout the process, so they know when something has been sent or delivered. It all adds up to greater visibility and a more seamless experience.
It will take a committed effort from loan servicing professionals to transition more total loss processes into a centralized, digital workflow. But doing so could help reduce the time spent by lenders on the administrative nature of total loss claims, freeing them up for the customer-service-oriented aspects of loan servicing that technology can’t yet (and may never) replace.
Providing human support and empathy while facilitating the digital experience remains the main priority.