LAS VEGAS — Bank of America Dealer Financial Services is considering partnerships with multi-lender fintech platforms to drive more volume, but there’s concern that doing so might help its competitors in the online lending space, said David Hollodick, the bank’s product and pricing executive for consumer vehicle lending.
“I look at it both as an opportunity and a competitive threat,” he said at the 2017 Auto Finance Summit. “The question for us is — and many are pondering this question — will partnering with a fintech drive incremental business that we wouldn’t have likely gotten otherwise with the model we currently have?”
Earlier this year, Bank of America launched a direct lending platform that allows consumers to browse inventory and apply for financing before completing the purchase at a dealership within the bank’s network.
Other platforms, such as AutoFi, AutoGravity, and Ally Financial Inc.’s ClearLane, provide similar services but draw from multiple lender partners.
“I’m more inclined to likely try some of [the fintechs] and see how it works,” Hollodick said. “The question is, Can we integrate into those platforms in an efficient manner? Is the customer experience going to be as good, or better? Or is it better on our brand? It’s interesting times, and I think they all have very interesting value propositions. We’ll see which ones stick.”
Ally has been “cautious” about this environment, said Jeff Danford, the lender’s senior vice president of auto finance. With ClearLane, Ally is able to control which lenders are on the platform.
Yet, Ally has been more willing to invest in new-model digital dealerships, as evidenced by the renewal this week of a flow agreement with Carvana for retail installment contracts that was upped to $2 billion.
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