How Auto Lenders Can Remain Relevant in the Changing Financial Landscape

It’s no secret that over the course of time, government regulations, technology and digitization, environmental factors, and social change will transform cars and the way we use them, affecting both the inventory auto dealers hold and the way they sell cars.

Digital transformation in auto finance is changing fast, thanks to digital transformation and the COVID-19 pandemic. All over the world, auto lenders are digitizing the customer experience by using technologies like biometrics, e-signature, and identity document verification. It has become easier to apply for auto title loans–remotely or in the dealership. Auto financing is becoming more secure and faster as digitization replaces manual ID-checks and paperwork.

91% of auto dealers believe a strong digital presence determines their overall success, however, 83% lack a digital strategy. One way auto finance lenders can digitally transform their businesses is by automating the auto finance loan process. Automation can reduce operational costs, increase loan volume, and ensure compliance. Let’s talk about the key disruptions changing the auto finance landscape, and what dealerships can do.

Perform Digital Identity Verification

Most auto lenders are reinventing the lending process by using digital identity verification. They perform digital verification of identity documents like national ID cards, passports, and drivers’ licenses. Some lenders use digital tools to take pictures of identity documents, which are then analyzed to determine their authenticity. This takes place online with remote applicants or in dealerships.

Some auto financiers are also using facial recognition for remote applicants. They compare selfies with the images on ID cards or passports. So, the customer can apply for a loan from their office, home, or anywhere else.

Digital identity verification techniques like facial comparison are now used to process remote loan applications. The digital tools are used to confirm whether the remote applicant is the person they claim to be. This prevents fraudsters from trying to pass themselves off as genuine loan applicants.

Embrace Digital Auto Finance Processes

In 2019, 77 million cars and light trucks were sold around the world. Americans bought 17 million new vehicles, while Europeans bought over 15 million new passenger vehicles. Without question, a big percentage of these cars are financed. In 2019 alone, 85% of car buyers in the United States paid through financing.

This translates to millions of hours spent processing paperwork and millions of finance contracts a year. A lot of time is also spent carrying out compliance audits.

Because auto dealers and sales reps spend a lot of time completing each finance agreement, they fail to deliver valuable customer services. In addition, manual processes don’t allow for agreements to be executed consistently and securely.

The same can’t be said for digital auto finance platforms. They deliver an easy, convenient financing process, significantly improving the customer experience, They also improve dealers’ cash flow and cut costs.

Auto financiers can bring innovation to market rapidly, thanks to cloud-based technologies and shorter implementation times. The technologies enhance the auto loan process and also deliver security, compliance, and efficiency.