Historically, indirect auto lending has been an impersonal process. A consumer waltzes into a dealership, kicks the tires on their favorite vehicles, secures financing based on rate or payment, and drives off the lot. Monthly payments are made to the lender of record until the vehicle is paid off, or until the customer trades it in for a newer model, and the process starts over again.
But that process has changed in the last two years as lenders prioritize an omnichannel approach to meet consumers where they want to be in the sales and financing process. More than ever, financiers now want to develop a lasting connection with the buyer that ensures they stick with the lender to finance their future vehicles.
At Bank of America, Head of Consumer and Small Business Vehicle Lending Product Fabien Thierry takes the spirit of omnichannel to the next level, harnessing the wider bank’s mission to improve the financial health of its customers by creating auto credit products that span the entire auto finance ecosystem and connect with customers on a personal level. Products can range from variations in loan term limits, to private label and specialty financing partnerships and everything in between.
“What drives me day in and day out … is the development of an innovative client solution,” Thierry told Auto Finance News. “Thinking about the scope and the breadth of the work, we have the ability to make a difference in our clients’ financial lives. When you think about 67 million households in the [United States], we take pride in delivering on the mission of helping our clients lead better financial lives and coming up with auto credit solutions that help them move their family forward.”
Thierry works closely with the bank’s sales, underwriting and fulfillment, and credit strategy teams to develop a go-to-market strategy for auto finance products that not only paints in broad strokes in both the direct and indirect spaces. And he also drills into niche markets such as wheelchair-accessible vehicle financing, recreational vehicle financing, and the budding electric vehicle (EV) financing segment.
“My job is to really create a clear vision for the team and understand what is happening in the industry, and where the industry is heading next, and develop a plan of action,” Thierry said.
Growth drivers in 2022
Optimizing Bank of America’s product offerings to meet clients’ needs has paid dividends in driving responsible growth for the auto lender this year, despite industrywide headwinds that have pushed down auto loan production. In fact, in Q1, Bank of America logged a 36.5% year-over-year increase in origination volume to $7.5 billion, which pushed its auto portfolio up 9.5% YoY to $49.7 billion.
By Q3, the bank’s auto outstandings grew to $50.7 billion, a 7.4% YoY increase. And while origination volume waned to $5.9 billion amid depressed vehicle sales in the quarter, volumes were still 13.2% higher than they were in Q3 2021. Net charge-offs came in at 0.03% for Q3, an increase of one basis point (bps) from Q2 and up from a recovery rate of 0.07% during the same period a year ago.
By another measure, Bank of America’s auto portfolio has grown 31.3% since hitting a three-year low of $38.6 billion at the end of 2020, when COVID lockdowns muted vehicle sales across the country.
“We’re optimizing our product offering and we’re doing that through a client centric approach, looking at how we serve our clients’ needs — that really drives the dealer strategic alliance,” Thierry said.
Broadly, Bank of America this year introduced an 84-month term option for its auto loans, something the Thierry said, noting that the program has been successful in lowering monthly payments for consumers. The bank also expanded its sales organization across the country to aid in the creation of new relationships with dealers and kept its pricing competitive amid a rising rate environment with a focus on prime and super prime customers, he said, but did not specify how much the team’s headcount had increased.
Granularly, the bank also modified its methodology for calculating recreational vehicle collateral values in response to market demand and feedback from dealer roundtables to strengthen its position in the segment, Thierry said.
“We have also established a partnership with [travel-trailer manufacturer] Airstream,” Thierry said. “, either digitally or physically, in the dealership where the Airstream dealers will be able to display and present Bank of America as a preferred finance partner.
In a similar vein, Bank of America has also doubled down on its wheelchair-accessible financing program, Thierry said. “Our commitment to this program is still very strong and we’re looking for an enhancement by partnering with additional dealer groups. We have an exclusive national partnership with [wheelchair van dealer] Mobility Works that launched a couple of months ago that looks into leveraging the power of the two brands.”
Bank of America has steadily grown originations for handicapped-accessible vehicles; year-to-date Q3 volume has increased 130%, according to the bank.
“In our business model, we go to market through a multi-channel approach,” Thierry said, adding that the bank is “thinking through not only the dealer space, but also we are looking into serving our clients’ needs. To us, it’s very important to understand the way we can drive a client adoption and provide financial solutions for them.”
A team of wolves
Thierry’s success as a leader can be attributed to his passion for — and wide breadth of understanding of — the auto industry combined with his ability to manage day-to-day vehicle lending operations while keeping his eye on future opportunities, his colleagues say.
“Fabien has a lot of passion for what he does, and he’s very strategic, always trying to think about what’s the next thing to help grow the business,” Mary Droesch, managing director, head of consumer and small business product at the bank and Thierry’s supervisor, told AFN.
“He’s managing an existing business, as well. So, he’s able to balance both through the day-to-day operations of consumer vehicle lending with ensuring we are spending as much time on what the future is and how we can be uniquely positioned to take advantage of some of the future trends.”
Eric Calaman, pricing and financial strategy executive at Bank of America, has worked with Thierry for over a decade in both mortgage and auto; he too praised Thierry’s ability to balance daily operations with forward-looking planning.
“It’s a relatively rare balance. You don’t see it very often in terms of somebody that can be a forward thinker, but also dig into the details and balance that out very well in terms of really understanding the nuances of the client experience,” Calaman said.
Calaman also pointed to his colleague’s “infectious” excitement for the auto industry as a key driver in inspiring excellence in his team.
“One thing that stands out about [Thierry] in terms of his leadership approach … is he gets very excited about what we’re able to deliver to our clients,” Calaman said. “He is always thinking about ways to do things better; what kind of advancements [we can make]; where we need to go from a market perspective in terms of staying ahead of the curve.
“When you talk to him, it’s very infectious. Infectious in terms of, he’s very passionate about what he does. That really rubs off on his team and the others around him in terms of focus on product perspective,” Calaman said.
In fact, Thierry’s passion for the auto industry dates back to the very early stages of his career at Ford Motor Co. in Europe, where he served in various positions across sales, marketing, finance and pricing for 14 years before emigrating to the U.S. to work at Bank of America, where he held roles in mortgage finance before returning to auto for the last four years.
“It feels like a full circle, coming back to my first experience,” Thierry said.
For his part, Thierry tries to create an environment where his teammates can feel safe to share opinions and ideas. “That’s really what leads us to have a team of wolves that are passionate about driving innovative client solutions,” he said.
“We give teammates room to grow, while holding them accountable to be driving the business,” Thierry said.
“I am not at all like a micromanager, I actually give them the space to learn to grow and also to fail as a result, but just overall driving the company and creating an environment where people feel passionate about driving clients’ solutions,” he said.
To execute on that vision, Thierry holds a weekly leadership meeting in which he gathers teammates from various parts of the business — such as purchase, refinance or dealer relations, to name a few — to share opinions, ideas and observations on product development and go-to-market strategies.
“I really believe that element alone enables everybody inside the team to work together as a team, think outside of the box, and keep pushing elements in the product space,” Thierry said, noting that he also holds town hall-style gatherings on a monthly basis to highlight various achievements and welcome new team members.
All in on electrification
A large part of the lender’s strategy involves not only educating consumers on EVs, but the bank’s private label business. “Aligning ourselves with partners in the market will really align with our internal core [environmental, social and governance] goals for sustainability,” Thierry said.
The Charlotte-based bank in June inked a strategic alliance with Lucid Motors to supplement its existing strategic alliances with Volvo and Polestar, a deal that was spearheaded by Thierry, Droesch said.
“We’ve had several key initiatives within his business this year,” Droesch said. “Lucid [and] that relationship with them in particular was probably one of the keystones of his year. It took a lot to get that done. And [Thierry] just demonstrated tremendous leadership” in driving and executing the deal, he added.
The bank’s second annual virtual EV show in August, called “EVolution,” was Thierry’s brainchild and another key initiative executed by Thierry’s team, Droesch said.
“At my previous job, prior to Bank of America, I was the chief marketing officer at another large bank,” Droesch said. “And so, when [Thierry] said he was doing this and here are all the scripts and the interviews, I said, ‘Well, who’s doing this?’ I would’ve fed it to an advertising agency.
“He came up with the idea, got a couple of people on his team who had no experience in doing anything like that, and it came out just incredibly well done and a top-rate production,” Droesch said.
“He just really believed that was a way to get the Bank of America brand out there, that we are here to support you and our clients and our electrical vehicle financing,” Droesch said. “That passion really transcends down to his team that they believe they’re doing something that’s been beneficial to our clients, with EVs in particular, and being supportive of a greater cause.”
Growth strategies for 2023
Looking ahead, Thierry is focused on looking for ways to simplify and automate the vehicle lending space while leveraging Bank of America’s relationship strategy with its clients, Thierry said.
Thierry will also continue marketing efforts to increase awareness around the tools, solutions and product offerings.
“Wherever our bank clients decide to start their journey, either at the dealership, with Bank of America, or with one of our strategic alliances — Volvo, Lucid or Polestar — leveraging that bank relationship to pass on some of that benefit and drive client acquisition or client deepening over time, that’s really where we’re driving the business,” Thierry said.
–Additional reporting by Amanda Harris
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