Digital transformation in auto finance: The MotoNovo story

Sarah Dixon,

Digital transformation is sweeping financial services, from the back office to the front-line delivery of products and services. Digitization delivers efficiencies and compliance benefits, as well as driving growth through a better, faster user experience. 

When it comes to financial services, customers are looking for speed, ease and convenience. For a bank or lender, offering a digital experience online or through mobile can mean the difference between making the sale or losing it to a competitor. This is especially true in sectors such as consumer lending, retail finance, and auto finance, where there is urgency and customers expect service in their moment of need – not a week to 10 days later.  

Although many financial institutions are yet to transform their paper-based processes into fully digital experiences, those that have taken the leap have seen tangible ROI. Financial institutions should look to these companies to discover best practices. 

UK-based consumer finance company, MotoNovo Finance, is one such organization. In 2012, MotoNovo automated their customer agreement processes using OneSpan’s Agreement Automation solution (formerly known as Dealflo, acquired by OneSpan in July 2018). By automating auto finance agreements MotoNovo has seen significant growth and a clear improvement in compliance and auditability. Today, MotoNovo is one of the fastest growing auto finance companies in the UK.

In this blog, MotoNovo Finance COO Dave Briggs shares insights from MotoNovo’s digital transformation journey. 

MotoNovo: New Tech Foundational to Growth  

MotoNovo Finance is an auto-focused consumer finance company headquartered in Cardiff, UK. As the second largest auto finance provider in the UK used car sector, MotoNovo Finance writes over £150 million (~USD$200 million) in new business per month. 

MotoNovo is focused on innovation as a way to make the auto finance agreement process easier for dealers and consumers. In 2012, the company sought to grow its 6% market share. Ambitious growth plans weren’t going to be achieved by just hiring more people; the company needed to do something transformative. 

“We were looking to improve the scalability of the business, the compliant journey for the customer, and the customer experience of interacting with us. We realized that we needed a partner to help us automate and bring new technology into the business”, says Dave Briggs, COO of MotoNovo.

From Manual to Fully Digital

MotoNovo provides consumer financing through a network of car dealers. In 2012, the paper-based finance agreement process was as follows: 

  • MotoNovo would email a PDF document to a dealer
  • The dealer would print and review with the customer
  • The customer would sign the paperwork in ink
  • The dealer would fax or email back the signed agreement

MotoNovo recognized that this slow, manual process, which frustrated customers and dealers, was a barrier to growth. As well as being inefficient, the process contributed to inconsistencies in customer experience and an increased risk of fraud. By relying on manual steps to be completed by an intermediary, MotoNovo had no control over the signing process and no insight into what the customer actually saw and did when they signed the agreement. 

“We were reliant on dealers to take customers through a paper-based signing process, often with agreements of 17-18 pages in length. We were concerned that customers weren’t getting a consistent experience, and we were concerned about the dealers’ influence on that journey,” explained Briggs.

MotoNovo engaged with OneSpan to fully digitize the finance agreement process. Using the OneSpan Agreement Automation solution, MotoNovo’s customers now complete their motor finance agreement via a fully digital journey – at home or at the dealership. This can be assisted, with the help of a dealer, or unassisted if the customer would rather enter into a finance agreement in a self-serve fashion. Approximately 40% of new business is now fully automated and hits the books without anyone seeing or touching it. In addition to this, 80% of agreements are electronically signed and 75% of agreements benefit from automated decisioning.

MotoNovo’s automated finance agreement process now takes place through a browser-based digital experience: 

  • The customer’s details (name, address, DOB) are captured electronically 
  • The customer’s application data is verified using a driving license number check
  • The customer’s identity is verified using knowledge-based authentication (KBA)
  • The customer confirms that they have read and understand the contract terms
  • The customer consents to the agreement with an e-signature
  • The signed agreement and audit trails are securely stored, and a copy of the e-signed agreement is distributed to the customer

Automating Identity Verification 

OneSpan’s Verification Hub is integrated with multiple identity verification providers to offer financial institutions access to a comprehensive suite of digital identity checks. Rather than depending on dealers to manually verify a customer’s identity, MotoNovo makes use of the OneSpan Verification Hub to automate identity verification through a series of carefully selected check types.
As part of the Motonovo application process, a request is made to the OneSpan Verification Hub to carry out an automated identity check on the customer(s) applying for the financial product. This check uses the name, date of birth and address given by the customer in the application process and checks this data against credit bureau databases to determine that the customer exists, and that MotoNovo can do business with them. Once the customer has passed this ‘know your customer’ (KYC) check they can proceed to the signing ceremony. 

Two further identity verification checks are then carried out on the customer as part of the signing ceremony:

  • First, the solution performs a digital identity verification check known as knowledge-based authentication (KBA). The customer is presented with a series of multiple-choice questions that only the genuine owner of the identity can know. KBA checks allow MotoNovo to authenticate that the person engaged in the signing ceremony is the same person applying for the financial product.
  • Once the customer has been authenticated, the customer must supply their driving license number, which is verified by the OneSpan Verification Hub. Personal details extracted from the driving license are then compared to the details of the individual applying for the financial product.

Accelerating Dealer Payouts

Due to the solution’s ability to instantly verify a customer’s identity, MotoNovo was also able to automate dealer payouts. Dealers now receive instant payouts at the point of signing, without waiting hours or days as they do with some of MotoNovo’s competitors. 

“For our dealers, cash flow is extremely important. The speed of payout to the dealers was as important as the efficiencies we gained from the process. Many of our dealers are mechanics, car buyers, advertising and sales professionals. They aren’t financial experts, and we shouldn’t expect them to be. By automating the agreement process, we take some of the pressure off the dealership team and ensure that customers receive consistent service.”

The OneSpan Agreement Automation Platform 

For lenders, retail finance companies and other financial institutions transacting with customers on paper, OneSpan Agreement Automation makes it easier to digitize financial agreements through capabilities, such as ID verification, workflow, e-signature, and vaulting of electronic contracts.

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.