<ul class="font_8"> <li> <div class="font_8">Addressing direct’s unique marketing demands</div></li> <li> <div class="font_8">Understanding the demographic subtleties of a digital-only business</div></li> <li> <div class="font_8">Partnership opportunities</div></li> </ul> [toggle title="TRANSCRIPT"] <div class="transcript-scroll-box">00:01As I'm sure many of you know, direct lending is experiencing a growth parallel to that of automotive e commerce, and is another example of innovation taking place before us. Consumers are spending less time at the dealership and creating virtually paper free shopping experiences through their computers and mobile devices. And although direct lending has expanded rapidly over the past few years, some argue that there's still room for further growth. This growth is both in terms of business as well as customer experience. Many customers in fact are able to finance a vehicle through in electronic device without ever knowing they even went through a direct loan process. Buying a car is dramatically a different process than it was a decade ago. I am therefore excited to introduce our fourth session sponsored by Island x. Featuring Jennifer Heil, the executive director of clear lane power By island with financial Jim Landy, the founder and chief executive officer of springboard auto, Samuel Lopez, the senior vice president and general manager of car finance calm, and Francois Peltier the director of open innovation for RCI bank and services. 01:24 Thank you. Thank you. 01:28 Great. Okay. So to sort of just simply begin with, could each of you introduce yourselves and give the audience a condensed version of what your company's direct lending portal does and how it differs from other models on the market? We start with you. 01:45 Hi, I'm Jennifer Hale. And 01:53 just talk, 01:54 okay, all right. 01:56 I am with clear line, clear lane and we are business units business unit within ally, ally as invested into a couple of years ago into a direct lending platform. And and we have taken upon servicing that market. What makes our, our platform unique, I believe, is there's two two major things, I think, first that were owned by a major automotive lender. And that ally sits as an anchor tenant within within that platform. And they compete with everybody else on that platform. I think the second thing is our process. We're very, very proud of our process, we have a process called Safe look. And it's done in some other areas of finance, but not so much in automotive. And that's a kind of gamification strategy where we ask the customer for a minimal amount of information. We we let them know if they're approved or not approved, and then they decide if they Want to go forward? If they go forward, then they give us their social security number they give us other pieces of information. And that we found is really important because customers are very keenly aware of credit scores now the impact of an inquiry on their bureau so we think that the fact that ally has to compete, you know, and they get no special preferential treatment on the platform even though we're owned by ally and the fact that we have this very respectful engagement process with the consumer makes us unique in the market. 03:33 Great. Hi everybody. I'm Jim it was springboard auto. We we set out three years ago to create a five star digital experience for the customer purchasing or financing an auto and you know, following up from that we we built you know hundred percent in house fullstack proprietary and then digital experience and as we went through that process and started talking to different lenders about About a partnership, what we heard from many of them was a problem they were having, you know, providing a digital lending solution to their members and their clients. And so, we pivoted from focusing entirely on B to C to a b2b solution where in essence, we white label our platform for large affinities banks, credit unions, and we call it lending as a service. In addition to the technology, we also provide what we call fulfillment services. So, the operational support, you know, kind of behind the scenes and is you know, which is necessary or needed for you know, pairing with a technology to truly provide an outstanding customer experience. So, our experience some of the features are, you know, for their consumer to be able to self direct through the entire process, which begins in a very transparent way once we you know, it should improve The consumer likes the offer, they open an account and then post opening an account, they see what we call the configuration screen. There's two components there. One is, you know, what we call sliders which, you know, enable the consumer to really dial in, what their loan preferences are from a down payment perspective from a term and as they move those sliders, they can see, you know, what the impact will be to their rate payments, so on. And then you know, with auto not being a frequent transaction for most people, you know, it's you're kind of going through price discovery and, you know, house taxes and license that everything works. So through services, we bring that in, and if their consumer as a trade in revaluing the trade in for them, if they have a lien on the barrel, we pull that in so for those of you and lending side for me with a buyer's order inside a dealer, we're basically creating that for the consumer real time that they can see holistically you know, with this transactions going to look like and then from there, they can shop You know, on the marketplaces, bring in different vehicles put in the configurator, and kind of design their loan. But the objective, among other things, in addition to transparency is once they get in the store, if it's a dealer transaction, it can be in and out in an hour. And if they can accomplish that, which many do, if you look at our reviews, you know, satisfaction goes way, way up. And so that benefits not only the consumer, but the dealer, because a dealer then has a customer that's more likely to come back for service, more likely to buy another car, they're more likely to refer them to their friends and on the private party side. In addition to everything I just mentioned, we also handle transaction management, which kind of D risks the transaction for, for the buyer, the seller has a lien will pay that lien off directly, whatever the difference is, we'll fund that to the seller, we'll send out a mobile notary. We have communication and calendaring that both the buyer and the seller can facilitate online so again, just trying to make it you know, it's empowering and is a great experience for the consumers right from the from the unique side is now our ability to offer lending as a service to banks, credit unions and large affinities. 07:13 My name is Samuel Lopez, Senior Vice President General Manager at car finance calm. Well, we've done at car finance comm is build a FinTech platform that connects borrowers, dealers and lenders to facilitate the direct loan process. What that means is for borrowers, what we heard is they want to have not only control of the experience throughout the lending process, but they want to make sure they stay with the same person, right. So whether you're in the case of car finance, they're the from application all the way to funding they stay with us the entire time. We don't send them to someone else. Even though we have other lending partners. They see the same branded, they work with the same people throughout because what our customers are telling us, we want to self direct until we don't right at that point, then we want to reach out and they're comfortable knowing That's where car finance comes into this. They don't need an app. All they need is a web browser, and they're good to go. And they can do all the functionality you need to fulfill whatever stipulations things like that get the information they need, on their phone or on their computer. For dealers, what dealers can do is they can close a loan directly with car finance, no other software needed. All they need is a browser. And this can happen real time with our point of sale. SAS solution, what they do is they're sitting there directly in the f&i office with the customer submit all the information they need via browser, they can close directly with a deal with the consumer. They're in front of them and beyond their way. Consumers love this because they're like throughout this whole step. I know where I am in the process and I know car finance is going to be with me while I'm with the dealer and the dealer knows I'm working directly with someone who's going to close this deal with me. They don't need to go around one dealer track or any of that stuff. They close directly with us and for lenders, what car finance brokers for them is an originations partner that can meet their compliance and brand standards. They're very much concerned about making sure that the partners they work with have the standards are on compliance controls the brand, right? They are working with someone that's going to be sharing their brand with them, right? So they want to have the confidence in being able to do that. We found a good deal of success, we see that success continuing to grow. You can you know, check out what our customers are saying about us. And those are some of the things that that that are making us unique, right customers are with us and and and dealers know who they're working with, and lenders know they have a trusted originations partner. 09:40 Good evening, everyone. My name is Francois plga. As you can hear, I'm French. 09:45 So I've done that. I have six kids. So I have Well, yeah, I'm a kind of a weird guy. 09:52 So I'm leading the innovation, the open innovation as we call it, RCI banking services. So our say banking services Is the bank of the Renault Nissan Mitsubishi alliance that is belonging to Renault group today. And we're financing to traditional captive business within 36 countries, we do not operate in the US, because the French sales finance business within the Alliance is not yet merged. So today we have two different groups working on sales finance, but we're working for both brands, but older brands have the chance to actually in 36 countries or cis 42 billion asset and it's a little bit more than $1.5 billion 10:36 net result. So it's not a big thing, but it starts to be something. 10:42 And we also have as we have the banking license. We also have some deposits from customers. We launched that three years ago, and we reached 15 billion in some European countries. So we are really expanding our captive business to something much more global because we Trying to be customer centric and customers a bad word. But I'm always, you know, trying to be kind of provocative internally. Because when I'm doing internal keynotes to try to, you know, move and get people work on on more disruptive ideas. I'm always asking this very simple questions to the OEMs guys and the sales finance people that are working for we MCs, how many in this room have ever bought a new car in their life? That that's cool. But when you when you are asking that to the managing director of the countries of RCI, none of them they all have company cards. So, yeah. So when we talk when we talk about customer experience, you know, it's kind of challenging. Well, we have surveys, we have marketing surveys that tells us that customer happy and unhappy but when you leave the experience, you know, it's something totally different and what we're doing today in our science, this is why I'm in this kind of lecture because we're Not doing direct lending today. We are looking at it very seriously because we're really thinking, today we're missing huge opportunities. Because when you see how OEMs in the world are looking at their business, they're looking at market share. See up? Sorry, Mister, I have to turn my head with the mic. And that's it. And we're focusing on new car sales. And this is what is the business. And when you just step back a little bit and you're looking at the customer, well, used car market is twice, three, four times the size of the new car market. And we know that tomorrow, the gold, the new oil is going to be data. So what if we take use our customer from Ford, or Toyota, sorry, guys. And through doing direct lending, and then getting them back to buy a new Nissan or Renault or Mitsubishi or infinity. So that's the whole point of me being here. And we're trying some tests now in Europe doing direct lending in in, in some countries in Europe, that are really, really promising. We're not really experiencing that, you know, we have this fear of risk or risk is indirect is much more riskier than the traditional business. But today's works really well. And we're willing to to expand that. So we are at this stage of trying to be really customer centric, and trying to diversify, or acquisition of channels from from the from this business. So that's it for me, 13:33 we can help you do that. Oh, I see that. 13:38 Now, Jennifer, you mentioned to me earlier that direct lending has a perception of being riskier for performance, but the performance is actually better. Could you compare direct and indirect from a risk and performance perspective for us? Sure. 13:52 So I've worked in direct and indirect 10 years and indirect 20 years and direct, longtime allies Finance. But one of the things that I that's been consistent is in all financial institutions that direct lending is looked at, and governed with a lot more scrutiny, and some of it for good reason. So on the indirect side, you have a dealer that's sitting in the middle of the transaction, they're very good at, you know, being the, the safety net of making sure the red flags and those type of things occur. That doesn't happen on a direct transaction. So it's going to have a more rigorous process, but outside the process, most of the programs are more or more conservative. I'd say also, you know, when you look at a direct portfolio, it's not an apples to apples comparison to an indirect portfolio because a lot of what you see in there is going to be refinance. refinances is our biggest product that clearly and so the refinance portfolio is just it's customers that are positively selecting to stay in their vehicles. If I'm a lender, I get to see how that customer performed. There, I'm putting them in a better position, I'm lowering their payment, you know, 50 or $100, that clearly in our average savings is $112 a month. So they're going to perform better. But even the characteristics of the transaction, I'm asking a consumer for, you know, their income, they tend to sometimes confuse net and gross and they understate their income, they don't always add extra income. And the same with the vehicle, they'll base book it, you know, a dealer is going to send you a vehicle that has every single, you know, whatever's on that car, they know that car inside and out, a consumer doesn't necessarily know that. So that's going to lead to better performance from losses, both in severity and frequency. So if you look at a direct portfolio versus an indirect portfolio, you tend to see losses to be about half of that on the direct side that you do on the indirect side, just in general Does anyone else want to? Yeah. 16:04 So my background on the lending side is, you know, in the below prime consumer, so from a high six hundreds down to 500 cut off and have been doing that in the direct space since 2001. And I think, you know, one of the one of the eye openers early on was, when we first started that company is called roadloans, which is a brand still in the market today. We really didn't know what to expect, and we had the operation in Dallas. About a year later, I went down to probably wasn't here a couple months, whatever. And I saw these letters on the wall in the direct teams side. I'm like, What are the letters from that? Well, those are customers that have sent us letters saying thank you, this was a great experience. If you look on the indirect side, there's not too many letters. So I think a lot of it is just customer empowerment. And especially for you know somebody who may not have the confidence to go into a dealer and talk about their financial situation. And really all they want to do is buy a vehicle. I think some of the other differentiators are on the direct side, you're getting the information directly from the consumer. And that alone is probably in my estimation, a 10%. Lift and expected defaults over over the life. But yeah, similar to Jennifer given the same, same credit attributes, similar structural characteristics, directors can outperform and direct 30 35% 17:29 Where do all of you see the biggest competition in the space? Is that your fellow panelists, FinTech startups, something else entirely different. 17:43 I'd say it's a combination of all the above. Obviously, fellow fellow panelists here would be competitors, but also in folks, we talked to folks that reach out to us. We see a lot of other maybe folks that we would in other companies that we wouldn't think right off the bat would be competitors. Things Very hard about this space, right? I think, you know, if for everyone up here and other folks who are in the direct lending space, if you're thinking, Well, you know, no one lender, I'm never really gonna get in this place wrong, they they're probably thinking very hard about that. Other larger lenders that are maybe very branch based are thinking very hard about how do I do this, right? How do I, I'm not going to replace my existing business. But I want it to be I want direct to be a bigger part of what this is. So it's almost like the challenge we have, it's we're not exactly sure who it is because it's almost everyone, right? Every day, there's always someone else who's trying to do what you're already doing or calling you and saying, hey, maybe we can partner and do this. So it's extremely fluid at this point. You know, for us, the way we see it is yes, we have our list of direct competitors. They always keep an eye on right. You're trying to stay ahead of the game. But we also dedicate a time, a portion of our time to thinking about those folks that is just not naturally thinking about right you naturally Don't think about certain folks or certain companies and we're trying to change our mindset they say no, they very much are it's not well, maybe one day or they don't get it, no, they get it or they want to get it. And you have to think about that. So it's changing that mindset internally, at a company like, for example, car finance, we're 55 people. We're part of a larger indirect lender. And sometimes we think, well, we're we're part of the larger engine, indirect lender, we're going to compete with our own parent company, right? It's just, we kind of have to change that that mindset. And if you're small enough, and nimble enough, and you you incorporate that as part of your DNA, I think it'd be very aware of what's happening and what's going on. 19:34 And I think on this subject, we should I mean, we're not thinking globally, what competitors we have, because it's really very niche markets, especially in Europe. It also in Latin America, in Latin America. For example, in Italy, our biggest competitor on direct lending is the grandma, for the fellow millenniums, that wants to buy their first car, to get it from their, their parents. So it's four But I'm saying if it's it's really serious. I mean, the banks today are competing a lot on interest rates. But customer in it, that's the customer experience is becoming more and more important. And just give them give you a very small example. And that was a couple of weeks ago, I had a flat tire in my 250 I have had the chance to have a company car which has an infinity, and it had a flat tire at home. So I had to find that phone number to call the assistance. So I called the assistance and had a great lady on the phone very nice that asked me what is the VIN number of your car. Always say, Oh, it's in the door and you need to open the door to find your VIN number. So I was trying to you know, with my crap English accent, I had to repeat this 16 digit thing. 20:50 That was my customer experience. And then they called him for assistance or the guy that was too busy. I waited two hours. That was my consumer experience. And 21:01 this is reality, 21:02 this is the this is what we're living in. And when we're able to find the, in the FinTech world, something that is able to enhance and to accelerate. So the question of price, I would pay 25 bucks a month more to get a great experience. So to me, it's competition needs to be seen not just on pricing, but the ability to serve better the customer. 21:25 Rather few thoughts on competitors. 21:28 I'd say, you know, our company has a history of partnering with fintechs, you know, provided you know, their models don't you know, are aligned with allies interests. We've partnered with carvana invested heavily in them. We've you know, recently partnered with with blinkers so we we deploy a partnering strategy and we know their competitors but we you know, we welcome the opportunity to partner and grow with those new companies and learn more about about the either the technology or The experiences that we're able to provide to the consumers. 22:03 I think, you know, our our strategy is really to enable, you know, the the incumbents, the credit unions, the the banks that already have the customers that are looking for a great digital experience. And so the combination of their existing relationship, they're attractive cost of capital and a great experiences. It was a great combination in the market. 22:25 Okay. And this sort of also leads into my next question, which is about customer experience, because it's always been such a vital part of buying something, but particularly now because there are so many options for customers, especially within direct lending. Sam, you told one of my colleagues that car finance built its direct auto finance system based on simplifying things. So I'd love for you to start. Yeah, absolutely. 22:53 I think that's probably or that is actually our driving force in our DNA of the company. Is the user experience and what I always direct my team to think about is thinking about the details, details matter. little details. I think your example on the spare tires felt phenomenal, right? You think, Oh, yeah, you're calling giving a vein and I mean, who the heck knows that? Right? You got to think about, people don't readily think about knowing the VIN. Right? When you're dealing in certain scenarios. So for us, it's what do we need to do to get the customer through the process? And it's not just well give them a couple pages, you know, a couple pages on the website, have them maybe download an app, enter some information, you're happy? No, that's not what it is. Think about what customers want to go through what time of the day, are they doing this? Do they want to call you right? Do they not want to call you? If you build all of that into your process, you quickly realize your end result is not going to be what you first thought it should be? Right. I'll give a couple examples. we debated for a long time whether we should build an app or not. And we said no because this is the one transaction someone does every couple of years. What is the lowest barrier to entry lowest barrier to entry is a browser. That is Every one has an everyone's phone. So your product should work on that. Right? The other thing you think in mind is how do customers want to communicate? I have tons of stories of our call center with us, uh, you know what I call 100 times that the customer? And they just don't answer the phone. So we implemented text. And we did this, we call the customer. They didn't answer you text them five seconds later, guess what? They they text you right back. They don't want to talk to you in person, right? They want to talk to you the way they want to talk to you. And you wouldn't necessarily think of that, well, you want a loan you've applied with me, why don't you want to answer my phone? Because you are not communicating with the customer the way they want to be communicated with right? Those are the kinds of things you have to think about the other. I guess the last piece that I'll close with is if you think about the transaction, the dealer for example, on a purchase transaction is always going to be at the center or very, very big part of the transaction. What do we need to make sure that the dealer is connected with your process? For us, it's well we know there's a number of different ways, right? Right one dealer trying, maybe we can do this and paper, stuff like that. But we designed something similar. We know every dealer was a computer, they have a browser, and they're gonna have a customer sitting in front of them with a smartphone, how do you take those ingredients and build a great experience around that? Right? So that's why at the beginning, I was emphasizing the need to know your customer know what they want. And from an end to end experience, think about how can I be with my customer from the time they first arrive until I'm sending them off on the vehicle and they're, they're hopefully happy with their experience? That is, you know, how we think about our experience every single day and that's what we took in, kind of we took it to heart and and and what we've built our product around taking that kind of approach to user experience. 25:49 You know, it's true that when you're looking at the App Store, you're just like finance, you have punched a bunch of apps on this and I think it's also because it's to merge emergence of fintechs introduces a lot of companies You know, growing up on this field, and like any other industries will, it will happen a time where we'll be we'll see constantly ization of all this. So I mean, I would say the best wins and the best exit also. So this is a bit different difficult to answer this question because it's true that there's, you have an overwhelming choice for customers, and you have very specialized companies that are specializing on a very, very particular part of the customer journey. It's it's pretty hard to find all in all approach. But to me, the biggest threats would be the, you know, the Amazon, for instance, Amazon wallet, you know, they're doing really well. And if tomorrow they decide to go in this market, those big guys, they have the capabilities today. I mean, Amazon, you don't have the innovations department. We have it in you know, my company is 152 years old. So yeah, you definitely need to embrace the change with a Traditional mindset, and with all those legacy we have that made also our success. So we need to, you know, take advantage of this to to go forward. But for me the big players that are already building an ecosystem, not only on the car transaction, but nor on the direct lending, either are the guys that really would be able to to scale that up really, really quickly. 27:23 I think our approach, you know, is it's not it's not a static target, it's a continuously moving target. And it's, you know, raising the bar. So if you know, we're a relatively new company, we have 50 ish employees, more than half of those employees are on the product and engineering side. So we're looking at our funnel metrics, you know, pretty much every day. Why is somebody texting? Why is somebody calling why, you know, weren't they able to self serve on the platform, and, you know, developing solutions and adding to, you know, the online user experience, so I think it's just, you know, constantly seeing where the customer is getting stuck. Why are they calling in Trying to resolve that issue. 28:02 And I would say the digitalization of the process is changing consumers appetite for, you know, for what they expect in a transaction. So, you know, a few years ago, you know, we we talked to every single consumer that came through, and we thought that was really our value prop. And, you know, as time you know, you know, look back a year or so, you know, customer started emailing us and saying, Don't call me or, or send me a text or I'll call you. And so, you know, we've started to focus more on, you know, self serve tools that allow the customer to, you know, to come in whenever they want. So, I would go some, a lot of what what Sam is saying, we're seeing that evolution, and we still put our phone number on every page, so the consumer is stuck, they want to talk to us, they can do that. But we're finding less and less of that, you know, demand, you know, for that, you know, customer that just wants to talk to us. 28:57 Yeah, we have an audience questions. That sort of relates to the customer experience? How do you get customer feedback about their preferences? That sort of makes me personally think of the trouble it takes to get someone to like answer an online survey, which sort of seems to be the antithesis of pleasant customer experience online? 29:21 I could be jumping that one. So as far as how do we get the customer to tell us that feedback? Don't ask a lot of questions. So here's what we did. We experimented with surveys and stuff like that. So we asked just two questions. One, what do you think right range, the usual zero to 10 writes are always great. I mean, zero is bad, or 10 is great. But the next question is critical. We just say why. And we put a blank box, you should see the amount of engagement we get from the customer. The problem there is that it's a little difficult to go through freeform text responses, but it has been an absolute wealth of information for us. We don't I could have turned that simple. Why right in that white box where you just Start typing into 15 questions, I can guarantee you customers after the third question would have just failed. Right? So it's two things. One, what point do you want to ask them, and we usually asked them at the point of funding, and where we think they're going to be either somewhere in our portal, or we'll send them a text reminder. But number two, don't ask a lot of questions. Invite them to, to just explain, for example, you when you're talking to someone, if you want to really know what they think, right, just ask him a question and say nothing and let them talk. You do that online. And the customers want to tell you, they want to tell you exactly what they think. Because especially when you're going through a process that's very, that's really just digital focused, right? They are the only ones who know what they've gone through. You don't really know what they've gone through because they're the ones that filled out an app at 2am gave you their document while they're maybe their kid was crying, but they had upload their driver's license, right? So they'll tell you this was easy, this was not but you got to give them that ability, which means as an organization, you have to be prepared to take that feedback. Right, if you're not flexible and willing to take the feedback and the way they want to give it to you, you're never really going to understand that it's that verbatim, initial gut reaction type of response that you want to get from the customer. So that's, that's, that's our approach. It's seems like basic, but it took us a long time to get there, like we didn't get there overnight. 31:18 We have a couple different ways that we do that. So we're still are clearly we have agents that are talking to the customers all the time. And so we kind of mandate that, you know, when our are called loan consultants, when they engage with the customer, and they're finished with the transaction, we ask that they reach back out to that customer, thank them for their business and ask if they could do anything differently. We also because of for regulatory reasons, you know, we are recording the phone calls. And so our trainers are not only listening, you know, from a regulatory standpoint, on what's happening in the transaction. They're also listening for cues and for themes and then they report that back, you know, those conversations to say, Are you hearing something good system that the customers are asking for, or, you know, or delighted by, you know, good or bad. So they give us that feedback in that manner. 32:08 We actually had pretty good luck with a survey. Amber's correct me was like 80% response, and we had probably more than a dozen questions on it. So we maybe got lucky on that. I think, you know, on our b2c side, that really keeps our finger on the lending polls for the the lending as a service clients. You know, I think we're the number one rated direct auto lender on number Credit Karma lending tree, I think if you search on Google, so that gives us a little bit of feedback but the real you know, traction we get is just instrumenting the funnel and seeing you know, where customers are dropping off whether the cycle times a different process steps and, you know, and seeing how we can continually compress the time it takes them to go through the process and then also There's a product called full story, which actually lets you watch what the consumer is doing on the web, post them doing it. So you can really see, you know, where they're getting stuck where they're having some trouble. And so we often you know, spent a lot of time looking at that or if a customer is calling in and maybe they're having a hard time explaining where they got stuck, we can pull up their exact you know, file and Where, where, and watch them kind of go through. So those are some of the feedback points we we look at 33:31 every big corporations where we were looking at on statistics like surveys, and what we initiated last year, in Brazil, for example, on the welcome package, you know, when you're sending words to your customer, some welcome package, and it was kind of a cost to us and we didn't see any value to it. So we had the idea to you know, randomly choose some customers from the previous six months, invite them and try to co work with them and say goodbye What's what could be improved? According to you? What did you like? How did you feel so more like a focus group thing. And that was kind of costly, because you need to incentivize the customer to come in to pay for travel for the hotel, and we did something like nice and neat that you get so much better value from, you know, direct talk, to get the CEO, with customers with the head of customer service, the head of marketing the head of communication, to get some feedback, live from those people that has experience in totally different ways. You know, the the service we were providing, and we were able to make really drastic changes in a way of approaching just the design of the product to the, to the welcome letter to all the processes we wanted to go to to onboard the customers and it out. So we saw a huge, huge improvement on our pen rates and you know, kewpie is where we're using internally, but at the end of the day, yeah, we were co workers. Cool ideate with the customers not like, you know, what did you feel? But that's cool work. Let's do it together. 35:08 Yeah. And another audience question. We heard a lot about machine learning this morning. Is there a place for that in the direct lending process? Are any of you You Are any of you using this currently in other areas? 35:24 Let's start. Our tech team has been looking at that we've actually been partnering with a company that under contract yet but to deploy that for a lot of for our A B testing. So we're online and looking at what's happening in the funnel, you typically you know, that there's a there's a learning curve involved there where machine learning can, you know, can deploy those A B testing strategies, you know, on you know, on the fly, you know, so so we're looking we're exploring those type of technologies in our process of engaging with the customer. 36:00 Anyone else using machine learning in any way? 36:02 Well, to me, I mean, I was, I would really appreciate it the first 36:07 keynote we had this morning about blockchain and machine learning. This is sci fi to us. 36:16 So when I hear about your machine learning algorithm, and I mean 80 80% of the people working in big corporation like mine, I'm actually is 3600 people more or less? 36:29 bunch of them. I mean, you know, I'm 40 I don't know, I don't know clue. Before I arrived in Silicon Valley. I didn't know what API was. I don't have a clue. I was crunching my Excel. And I was happy with that. And, and people in Paris, this is the same. So Win, win. So my mission now My goal is to educate on machine learning. I'm not talking about machine learning, just data, what is data so We need to foresee and we need to anticipate and we need to project that's true. But first you need to educate you need to get the skills first. So it's HR and training issue today we have internally to be able to run through all those challenges we are facing to be able to catch up with technology. Because when even the is Director, he doesn't really understand why we should have a cloud. Why? 37:26 That's the reality. So to be able to catch up to machine learning and all the cool stuff that has going on in FinTech. Today, I'm a teacher in Germany, that's my that's my job. 37:40 And speaking of catching up, credit unions have gained market share largely driven by online originations, what lessons can be gained from that trend as a larger institution looking to do the same. Jim, you previously told one of my colleagues that springboards customer acquisition. Strategy started with partnering with credit unions. So I'd love to start with you. 38:06 Yeah, I think, you know, looking at the direct space, you know, it's tough to get data, the Bureau's don't differentiate a direct and indirect but I think it was JD Power did a survey A number of years ago, which is the best one I've seen. Maybe there's been another one out there. But at that point, direct lending was, you know, somewhere around 20% of the overall market. And credit unions had about two thirds of that two thirds share of that 20%. So overwhelmingly, credit unions are, you know, in that dominant role for for direct to consumer, and I think it's consistent with, with our culture, very member focused. And so that's where, you know, we you know, we put our sights as we as we built our platform. We got lucky in that our strategic investor is key mutual group, which is a Mutual Insurance company that spun out of The credit union National Association, and they touch or have relationships with over 95% of all credit unions in the country. So that kind of gave us, you know, distribution and access to, to that market. And so yeah, I think, you know, just, you know, that's, that's kind of in their, in their DNA, that's how they approach the market. 39:24 I'd say it, you know, clearly we've, since our inception, we've partnered with, you know, credit unions that sit above ally. And one thing that I think that they've they've done extremely well for years is that they've understood that there's a segment of the population that wants to, to understand their or obtain their financing upfront, or understand the terms of reference and they've done, you know, Marvels at building that, that process in that market. So, you know, we feel like we're philosophically aligned from a consumer centric and a member centric point. And, you know, and I think that's That's what they've done. Right. And that's why they've been able to grow the market share. 40:05 And then just kind of the last one on that it's with regards to conversations we've had with credit unions What? You know, as Jim was saying, right, they every member focus so it lends itself well to a partner that delivers a good user experience. One of the things that we've seen companies and credit unions and others that are going to be following is their as they look to get into the digital part of the digital space for direct lending, they're looking for that partner that can provide a turnkey solution for them, right, be it someone that they can just quickly plug into or someone that can quickly get them up to speed because most Koreans don't have a ton of resources to you know, develop dedicate half their staff to product and technology, stuff like that. So what we found in our conversations with them is they understand the user experience, they're very guarded of their user experience and of their members. So what they're looking for is, you know, can you provide us this turnkey solutions that will work with us, right, and I think the direct lender that can print That for them is going to be making a lot of headway. 41:04 And one interesting thing I would add is one of the credit unions we're working with now, and does both direct and indirect. And we were asking them, how many of the members that are applying direct, close indirect, and like, geez, we don't know. And so they did a survey, I think was over three months. And it turned out that 40% of their indirect business actually initiated directly with the with a credit union online. Branch. 41:32 I'd be interested in knowing everyone's sort of opinion on whether direct lending will ever completely replace indirect especially with the rise of mobility. 41:45 I would say an emphatic no to that. I think that what I think will happen is that direct and indirect will kind of merge into one channel and we're, we're making big bets on that at clear lane and releasing Product within 60 days where we're going to get the goodness of the direct process or the transparency of that process and marry it with the dealer process, which we still believe that point of sale transaction is still even though it takes might take, you know, three hours is still the most efficient way to buy a car. So, we believe that, that, that that's that'll always be there. There's obviously a growing market and desire for the mobility services. And I think, you know, I personally think that that's a kind of moment in somebody's lives. If you're in a metro area, and you're single, it's a very, very attractive option. If you're in the suburbs, and you've got three kids and soccer and ballet bras, you know, practice, that might not be a good option. But I think what's exciting about this time is that, you know, the, the direct indirect, you know, mobile mobility services, there's a place for all of that and I think you know, I know that ally is is going To be participating in all of those opportunities, old ones and new ones. 43:06 Yeah. Yeah. As we were talking about at the very beginning of this this afternoon on autonomous driving to DRC is really shifting from the traditional model of captive sales finance business to mobility operator. So we acquired bunch of companies, and in the previous two years, mobility aggregators, ride hailing companies, car sharing companies, payment platforms, because we understand that and we this is our vision that we think that's going to be an ecosystem. So the customer at the end of the day, he will have to book a car, he will have to pay for it. Maybe he's not going to own the car or lease the car either. So fleet Asset Management here is going to be a big, big thing. How do you how do you envision we're working today with cities, we launched a multi corporate program with the city of Paris, with insurers ourselves Nissan Renault The city of Paris to try to think about all those mobility challenges that we're going to face with Robo taxis, but not only. And that's why we, you know, we develop payment platforms, wallets. And I wouldn't just, you know, oppose direct lending to indirect lending, as you said, I think there's going to be complimentary, but that needs to be seen as part of an ecosystem that we need to create, to be able to create value for the customer for the consumers. 44:29 And then also, as far as I'm thinking about your question, right? will direct replace it in direct etc, it's probably not going to happen. But also at the same time, I think, as a lender, whether you're director and again, we have to keep in mind customers don't really know the difference, right? They don't really care even. They're like, they don't go into a dealer and say, Well, I'm going to get this indirect loan because my credit union couldn't give me the Direct Loan I wanted. I don't think I've ever heard a customer say that. But at the same time, I think what you will see is, you know, we talked about, well, maybe they'll converge, there'll be some overlap. The reason that will happen is because as lenders, we will realize customers don't know the difference. So whether I'm in indirect space or direct space, I'm thinking about that user experience, right? So the user experience will start to bleed itself into the indirect space. And they'll think more about that as well. And that's where they'll start to look alike. But I don't think one will replace the other definitely complement each other. And I think as customers demand this, and a better experience is delivered to them in the space in, in the financing space, when new models do arrive, new models around mobility, which, you know, maybe they're even if we think about mobility, we don't really know what it'll look like there's there is always a good chance that it will still involve a large part of vehicle ownership, right? We just don't know what that will be that private ownership will look like. But as the financing aspect of that becomes closer and there's a lot of similarities and there's a focus on user experience when these new types of ownership models are introduced customers already expecting a better user Experience regardless of the lender, so when they are introduced, they're already educated about it, they can maybe more quickly adapt. Because now you know, it's it's, it's to them. It's just a loan for me, right? So now it's I'm going to get a vehicle and maybe it's mobility based, maybe not. But I know I can get it from any lender that will then provide me that great user experience. That's that that's how we see it could go again, we don't know. Right. But as long as that emphasis on user experience happened, regardless of the lender, right, and we think about the customer because customers right now, they don't know the difference. 46:36 I mean, I think you know, dealers are embracing, trying to provide a digital experience. So you know, they'll continue to do that. Certainly that you know, that a new car. It's a been transaction. I think the OEMs are prohibited from engaging in direct so you know, that activity is going to stay, stay indirect. There's a lot of compelling reasons why you would see a shift to direct but I've been saying that for 15 years. And hopefully that's about to start. 47:02 Great. We have time for one last question. This one's an audience one, and it's for Jennifer. Since you mentioned exploring machine learning, is there any timeline for that ally? 47:12 I just recently had this conversation with the company that we're talking to that we partner with that ally. And so I don't know what the timeline looks like. But, you know, it's very attractive to us. And I'm hoping that we see, you know, some engagement in that, you know, hopefully by the end of the year. 47:31 Well, thank you, everyone. This has been really exciting. </div> [/toggle]
