Agreement Automation for Auto Finance: Removing Risk from Agreements in 1000+ Dealerships

Sarah Dixon,

The benefits of digitization for auto finance have long been recognized in the auto finance industries. Customers want simple, instant access to vehicle finance. Dealers want an easy process where the customer can drive off the lot with a financed vehicle on the same day, without the burden of worrying about legal paperwork and compliance. Finally, auto finance providers want consistent, accountable, auditable processes across dealerships, which require little administrative burden but provide protection against fraud.

Agreement automation can help customers, dealers, and finance providers achieve these outcomes. Agreement automation for auto finance involves the digitization of the customer’s finance journey, including identity verification, agreement presentation and signing, and the capture of all supporting audit trails.

By automating the customer agreement process in-dealership, finance providers can guarantee that every customer goes through a consistent, compliant process which achieves the best outcome for the customer (a quick, pain-free process which enables them to access finance there and then), while also protecting the provider against fraud.

Investec Evaluates E-Signature and Digital Identity Verification Technology to Improve Customer Experience

Investec is an international specialist banking and asset management group. In 2014, Investec moved into the retail automotive finance sector with the acquisition of Mann Island Finance, a broker supporting over 1,000 dealers in the prime retail space.

In 2014, Investec began to evaluate how technologies, such as e-signature and digital identity verification, could be used to improve the customer agreement process for automotive finance. Peter Orton, Commercial Director AFG Automotive, Investec explains:

“We’re always thinking about how we can make the customer contract process more efficient and streamlined. People are used to the self-serve experience they get when shopping at sites like eBay and Amazon, and we wanted to replicate that ease-of-use and customer-centric ethos.”

Digital Identity Verification Used for KYC Compliance  

It was important that any solution incorporated robust Know Your Customer (KYC) checks that would enable Investec to prove that they know who the applicant is and that the applicant was genuinely present during the agreement process, whether that agreement took place at home or in the dealership.

KYC can be achieved digitally by matching application data (such as name, address, date of birth, and bank details) to trusted data sources such as electoral roll and credit bureaus. This mitigates risk by screening customer identity against negative data to identity fraud and anti-money laundering activity. IP geolocation, device verification, and corporate checks also contribute to building a strong verification profile of a customer.

Removing risk from the financial agreement process was a major consideration for Investec, who looked for a solution that would offer them the knowledge that agreements were executed compliantly and that all relevant know-your-customer (KYC) checks carried out.

Digital Auto Finance

Digital Auto Finance

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Finding a Proven Agreement Automation for Auto Finance Solution

OneSpan’s agreement automation solution, which combines digital identity verification with e-signature and audit trails, appealed to Investec due to the company’s track record in auto finance, and also due to the solution’s ability to improve the customer experience while also improving compliance. Orton goes on to say:

“Our main concern was finding a provider with a solid track record in automated finance solutions. It needed to share our focus on creating a compelling customer experience and understand the importance of the security and efficiency of the process. We needed an end-to-end solution that provided us with a clear audit trail.”

How Agreement Automation for Auto Finance is Used to Improve UX

Utilizing OneSpan’s agreement automation solution (delivered as a white label solution and branded as Mann Island), Investec’s customers go through a consistent, fast, friction-free process to sign up to finance at a dealership. When a customer is ready to sign up for an agreement they receive a link to a unique URL. Opening this URL from a desktop, laptop, or mobile device starts the secure and automated agreement process, which includes online identity verification and authentication, online document presentation (with the option to download or print), and online signing. The customer can choose whether to complete the process in the dealership or at home.

Once the customer has been through the process they hand control back to the dealer. The dealer completes the process by uploading a dealer invoice. They can also upload supporting documents as needed.

Once the agreement process is complete, the dealer submits the agreement to Investec with a secure link to all the documentation. Investec can then examine the full audit trails when required.

Benefits of OneSpan Agreement Automation for Investec

Over 25% of Investec’s financial agreements are processed using OneSpan’s agreement automation solution. The benefits for Investec include:

  • Increased Efficiency

    A reduction in the number of manual processes that Investec and the company’s dealer network need to perform has led to increased efficiency. Robust online KYC checks also reduce the need to conduct manual identity verification checks. Orton describes one major benefit as follows:

    “One major benefit of the new process is the reduced requirement for multiple forms of proof. The automated process has a clear system of ID-checks and authorization which means we can create a more efficient process for the customer and dealer.”
  • Increased Customer Satisfaction

    Investec was inspired to start using an automated solution by the customer experience provided by businesses like Amazon and eBay. OneSpan’s agreement automation solution has resulted in an increase in customer satisfaction as the agreement process is easier to complete. Feedback from customers has been very positive, as explained by Orton:

    “We’ve had very positive feedback from the dealers and customers that have used the system. Customers are sent a link that they can use to complete the signing process with the dealer, or at home, giving them greater flexibility and more time to think through the contract and read it thoroughly. The customer doesn’t feel rushed, and the dealer can feel confident in the agreement they have made.”

Removing Risk from the Agreement Process

Although Investec uses extensive fraud prevention processes as part of its underwriting process, OneSpan’s solution allowed the company to further remove risk from the pay-out process for brokers, as Orton explains:

“The main benefits of the automated process are around removing risk from the pay-out process for brokers. Now we know that when we get an agreement through from a dealer, that agreement has gone through a secure and auditable process. It helps us make the pay-out process more efficient.”

Consistency of Service

Customers get a consistent service regardless of which salesperson or dealership they work with. This makes the agreement process easier for dealerships and helps the business ensure that regulatory requirements are met.

Sarah is a technology marketing expert with 10+ years of marketing experience in fast-growth B2B SaaS and professional services companies within financial services and law.