Auto Lending: Speed, Ease, and Digital, Please01.09.2019
The biggest influence on auto lending may not be rates and terms, but rather the growing importance of ease and speed.
Technology gives consumers quick and convenient access to vehicle information, which has caused buyers to alter their purchasing behavior. Now, car buyers regularly conduct research online and make a decision before even visiting the dealer.
As more consumers conduct research online, vehicle financing is responding accordingly. Historically, most lenders digitized only part of the loan process. But we’re now seeing a rapid advance toward a more complete digital end-to-end lending platform.
Fintechs and financial institutions recognizing the strength of partnerships are driving this digital transformation.
As the Bank Administration Institute notes, “Fintech brings cutting-edge customer experience, speed to market, and an agile approach to keep up with changing customer needs. The [financial institution] brings the brand, customer base, balance sheet and regulatory framework.”
These alliances enable your competitors to develop streamlined lending platforms that incorporate the entire loan process—from application to decisioning and funding—all in a few fast and easy steps.
Applying artificial intelligence (AI) to credit scoring will enhance digital lending platforms. Moving beyond traditional attributes, AI will draw from vast amounts of data to identify and connect alternate traits to form valuable insights and a more accurate credit risk model.
AI’s speed will mean quicker decisioning during the digital loan event.
As consumer expectations and preferences continue gravitating toward fast and simple, a fully digital experience will become the norm. Credit unions that have long relied on lower rates to attract auto loans will have to consider a strategic shift.
(via CUNA News)