Reimagine Auto Finance: Make Every Customer a Personalized Offer in Real-time
September 13, 2022
- Customer Centricity
Driven by the lingering effects of the COVID-19 pandemic and the ever-growing popularity of online purchasing in every retail sector, online auto buying now accounts for nearly a third of new car purchases.
Online buying and the need for instant gratification place enormous emphasis on making personalized financing offers to each customer in real time, without incurring unnecessary risk or violating governance standards.
Lenders are finding that today’s disconnected operations are ill-equipped to keep up with the personalized, intelligence-driven and highly-competitive world of tomorrow. This gap points to the need for rapid and significant improvements in technology infrastructure to meet market needs.
As an auto lender, what must you do to seize the opportunities presented by this new world?
Prepare and execute now to provide a seamless digital experience that presents buyers with enticing and personalized offers.
Using the Changes to the Automotive Financing Market to Your Advantage.
One of the smart things to do in an ever-changing market is to use the change to your advantage. In the last two-plus years, the auto lending market has been almost unrecognizable from even its recent past. Younger buyers in particular express a willingness to complete all or part of the purchase process online, as seen in this breakdown of consumer preferences by Deloitte:
Source: Deloitte 2021 Global Automotive Consumer Study
With more purchases taking place entirely online, and with younger buyers’ expectations of instant gratification, credit decisions must be immediate, but still protect the lender’s business model and financial integrity.
Getting there requires stepping forward with composable intelligent digital decisioning powered by predictive machine learning modeling, optimization algorithms, smart automation and data-driven personalization capabilities.
The evolving all-digital auto lending landscape also means that you can play offense and capitalize on the changing market conditions to uncover new opportunities. The recent eBook by Earnix “Seizing Opportunities in Digital Automotive Finance" talks about making customers personalized offers in real time, offers that are compelling and showing them that their needs are being recognized and accommodated.
The eBook discusses modern analytical tools, such as dynamic pricing and predictive modeling that make these personalized offers a reality, shortening time to value and closing the business before competition can react.
Making every customer a personalized offer in real time requires 3 key abilities that represent a unique combination of strategy, technology, and processes, including:
The Ability to Adjust Quickly to Changing Market Conditions
The proven Earnix solution allows you to execute on a vision in which you can:
Adjust pricing strategy as often as you see fit, based on world-class analytics and easily-accessible “what-if” scenario modeling;
Use a sophisticated analytical engine to forecast demand and profitability at the customer level;
Simulate customer behavior in real time;
Leverage customer-level insights to generate portfolio-level strategies; and, automate contract validation.
Agile, Intelligent and Compliant Business Operations
TAt Earnix we create the infrastructure needed to navigate ongoing transformation. Agile operations help teams across the organization thrive by making changes such as implementing new decisioning models, rolling out new products, and evolving pricing strategies seamlessly and instantaneously.
Among the benefits of an agile and composable organization:
Offer transparency and interoperability between various departments within your organization;
An ability to confidently meet increasing regulatory scrutiny;
A readily-accessible audit trail for every pricing rule and decision, with that audit trail generated automatically as it is implemented; and,
Assumption of less risk, while increasing revenue and profitability.
Forward-Looking Strategy to Capture the Power and Adaptability of a Composable Technology Architecture
No modern automotive finance system is an island. The answer to meeting the needs of the marketplace is a composable technology infrastructure, one that employs application programming interfaces, or APIs.
The Earnix solution works as an intelligent layer that connects existing systems, new technologies, and diverse teams to create more focused and flexible solutions. This unique approach enables our customers to:
Realize immediate operational improvements while eliminating silos;
Reduce reliance on legacy systems, allowing them to become record-keepers, and accelerating the adoption of new dynamic pricing methodologies; and,
Perform transitions in steps, rather than subjecting IT teams to a “rip and replace” scenario, with the cost and disruption it entails.
A composable architecture also opens up new and exciting possibilities for connecting with business partners who provide complementary solutions, increasing your reach and allowing you to potentially offer a broader array of products and services to borrowers.
The Bottom Line: Improved Strategic Outcomes
When all these measures are taken as a whole, Earnix will allow you to increase your market share of loans for both new and used vehicles. Discover more details in our eBook “Seizing Opportunities in Digital Automotive Finance."