TECHNOLOGY and processes that allow for real-time online decisions are set to be a key factor for the motor finance sector in 2021.
Startline Motor Finance said that with more and more used car buying activity moving online in the wake of the pandemic, there is increased emphasis on integrating applications into digital processes seamlessly.
Chief Executive Paul Burgess said: “Like many motor finance companies, we’ve been digitally active through a number of finance and dealer portals for many years, and we’ve long had a strong awareness of the importance of the speed of decisioning.
“What we are starting to see now, with a jump in the amount of used car activity taking place online because of the coronavirus crisis, is an increasing emphasis on bringing the decisioning speed down to a level where there is barely a pause in the process. If potential customers are made to wait at all, the drop-out rate for applications is very high.
“Online consumers are conditioned to expect actions to be completed in something very close to real time and meeting this expectation is going to be a major point of investment for the motor finance sector in 2021. Certainly, we are making some changes in this area ourselves, with the aim of ensuring our automated decisioning is as fast as possible.”
Burgess said that the challenge was to create digital processes that met the requirement for speed but also ensured that responsible lending decisions were being made.
“Inevitably, there is a trade-off between speed of decisioning and number of approvals, with the emphasis rightly being placed on caution. Our digital processes have a lower approval rate than if a human being assesses a more involved lending decision.
“This is really where motor finance companies bring their expertise to bear, translating as much of their knowledge as possible into digital approaches that work for the majority of car buyers, while still lending responsibly.”
He added that anticipating and meeting dealer and other introducer technology needs throughout the pandemic had been an important part of Startline’s success during 2020.
“We’ve spent a long time looking at online processes in which we are involved and fine-tuning them at key points. In the current market, which remains understandably volatile, we’ve found that small changes can have a big impact.”
