Speed and precision in driving auto lending

October 8, 2015 by Guest Contributor

auto lendingKey drivers to auto financial services are speed and precision. What model year is your decisioning system?

In the auto world the twin engineering goals are performance and durability. Some memorable quotes have been offered about the results of all that complex engineering. And some not so complex observations. The world of racing has offered some best examples of the latter. Here’s a memorable one:

There’s no secret. You just press the accelerator to the floor and steer left.Bill Vukovich

When considering an effective auto financial services relationship one quickly comes to the conclusion that the 2 key drivers of an improved booking rate is the speed of the decision to the consumer/dealer and the precision of that decision – both the ‘yes/no’ and the ‘at what rate’.

In the ‘good old days’ a lender relied upon his dealer relationship and a crew of experienced underwriters to quickly respond to a sales opportunities. Well, these days dealers will jump to the service provider that delivers the most happy customers. But, for all too many lenders some automated decisioning is leveraged but it is not uncommon to still see a significantly large ‘grey area’ of decisions that falls to the experienced underwriter. And that service model is a failure of speed and precision.

You may make the decision to approve but your competition came in with a better price at the same time. His application got booked. Your decision and the cost incurred was left in the dust – bin.

High on the list of solutions to this business issue is an improved use of available data and decisioning solutions. Too many lenders still underutilize available analytics and automated decisions to deliver an improved booking rate.

Is your system last year’s model?

  • Does your current underwriting system fully leverage available third party data to reduce delays due to fraud flags.
  • Is your ability to pay component reliant upon a complex application or follow-up requests for additional information to the consumer?
  • Does your management information reporting provide details to the incidence and disposition of all exception processes?
  • Are you able to implement newer analytics and/or policy modifications in hours or days versus sitting in the IT queue for weeks or months?
  • Can you modify policies to align with new dealer demographics and risk factors?

The new model is in and Experian® is ready to help you give it a ride.  Purchase auto credit data now.