Remote Auto Financing: Recreating the Dealership Experience in the Digital World

OneSpan Team,

As the auto sector faced uncertainty, some of the industry’s top players sought to fully embrace the use of digital channels in order to contend with the massive changes in consumer behaviors.

The auto industry and its consumers are showing a greater appreciation for the technologies that enabled self-serve digital channels to thrive during lockdowns. A November 2020 study of U.S. consumer financing satisfaction found that digital auto loan applications have increased by 8% year over year with 40% of future borrowers preferring at least part of the loan origination process to be carried through digital channels.

The convenience of shopping remotely has certainly convinced many to choose digital as their preferred channel, but car buyers involved in transactions with higher degrees of complexity, value, or risk still desire a level of human assistance from their auto lenders. An Aite-Novarica Group report on digital-first banking found that consumers prefer to resort to channels that continue to provide some level of human interaction when they are faced with more complex transactions like auto leasing, financing, or even selling on secondary markets. This report was then confirmed by the dealers themselves. When customers could return to the branch, auto dealerships saw their floors fill back up with prospective buyers seeking in-person guidance.

In this blog, we’ll review how auto financiers can find a competitive edge by refining their customer experience and leveraging technologies that deliver rich human connections entirely through highly-efficient and secure digital channels.

What’s Holding Digital Auto Finance Back?

The auto industry has been slow to adopt digital channels., Even today, 83% of dealers still do not yet have a dedicated digital strategy despite 91% agreeing that a strong digital presence is important to their overall sales strategy.

End-to-end digital channels are concerning for the auto dealers, because they worry that the loss of facetime with their customers would result in a reduced ability to build a strong human connection and level of service. This in turn could negatively affect their bottom line.

Likewise, consumers are also discouraged by a lack of human assistance when they feel guidance is needed. But if human assistance can only be offered on location, customers will typically need to complete the following steps in order to apply for financing for their new car:

  • Making a trip to the dealership
  • Interacting with the lender
  • Verifying the client’s identity (e.g., driver’s license)
  • Proving income (e.g., check stub)
  • Completing and signing asset financing paperwork

By offering human-assisted secure virtual experiences for their customers, car dealerships and auto finance companies can retain the same level of customer service in digital channels as they would normally deliver in person. Meanwhile, customers can remotely complete each step in the traditional auto lending and car buying process on their time, in a secure and collaborative digital environment.

Essential Technology Mix for Remote Auto Financing

There’s a significant opportunity for the auto finance industry to adopt the right set of digital capabilities to power a convenient, easy to use, human-assisted remote financing experience that can significantly contribute to higher customer satisfaction.

For instance, a virtual auto financing process with video-enabled communications brings the human touch back into the equation. Face-to-face meetings in a contact-free digital environment give customers peace of mind that they can get their questions answered as they work through complex or high-value agreements, like loan documents. At any point, they can be joined by an agent or Finance & Insurance (F&I) manager on a video call to walk them through the vehicle purchase process, as if they were speaking to each other in the same room.

Co-browsing capabilities come in handy when customers need a little more hands-on guidance. They allow dealers and their clients to collaborate on a shared screen with the ability to pass control to one another as they complete the agreements and upload supporting documentation. This real-time collaboration provides for an interactive, higher-quality customer experience.

Dealerships can also leverage identity verification and e-signatures to introduce further security and efficiency gains for their customers. There’s a host of robust ID check and authentication tools available to dealers to remotely validate identities for existing clients as well as new customers requiring much higher levels of identity assurance for car loans. After the customer’s ID is verified, e-signatures eliminate the need to work with paper when signing documents, allowing automated workflows to securely streamline the financing process while capturing comprehensive audit trails of every step.

Why Auto Financiers Need to Act Fast on Digital Lending

A McKinsey & Company report predicts a substantial acceleration of digital banking trends over the next 3 years, possibly resulting in up to 25% fewer branches. Meanwhile, the remote advisory channel is expected to take up to 35% of complex financial services. This stresses that today’s traditional auto financiers must quickly adapt their digital strategies for the “next normal” of the automotive industry.

Tomorrow’s top auto industry players will offer highly optimized auto financing experiences with greater collaboration through human-assisted virtual channels powered by secure identity verification, electronic signatures, video conferencing and real-time collaboration. Learn more about how other financial institutions and providers have demonstrated a strong competitive advantage by adding the human touch to the virtual customer experience as part of their digital transformation initiatives.

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