In 2015 the Motor Finance market experienced considerable growth with a record number of new car sales, as well as an increase in used car finance. The market has also undergone significant change, most recently FCA compliance has resulted in a number changes including the departure of a number of smaller brokers from the market that decided not to go through the new application process.
This change has resulted in a number of new lenders looking to enter the market. In a recent article in Motor Finance online, Mark Gow, Director of DSG Finance, indicated that the main tactic new lenders are using to try and secure a place on as many broker panels as possible is price. He mentioned seeing very little in the way of innovation and that “It unfortunately all comes down to that commercial, transactional price about commission or rates.”
We recently contacted one of our clients to find out about their experiences and the feedback was very different to that of DSG Finance. They said that some of the new entrants to market who approached them have offered new technology that is better than that of established lenders. Their systems are sometimes antiquated, making it difficult to update and accommodate changes to regulation and new technology which is increasingly important.
The FCA has also had an impact on dealers who are streamlining their operations in an attempt to minimise their digital footprint on customers’ data by reducing the number of searches. Regulation incentivises dealers to have fewer lender relationships and at the same time motor finance is more important than ever with the new car and used car markets continuing to grow year on year.
Under the new legislation, dealers are now required to be more transparent, both in terms of providing customers with the right information, so that they can make an informed decision and being clear about their commission before a customer signs a credit agreement. Customers will be placed at the heart of the process and the changes to the regulations mean that they will be treated in an open and consistent way.
This will impact the end user’s experience and dealers want to present customers with a quick and easy application and approval process. Technology has always played an important role, but now more than ever it is needed to make complex procedures more efficient. Customers want to be able to fill out their details online, and even in some cases, complete the loan process and receive an almost instant decision.
Two key technology areas are expected to play an important role in facilitating more efficient finance; automation and e-signatures. Dealers are looking for lending solutions with automation which enables them to offer customers a quick response to enquiries, making the whole process as quick and painless as possible. As well as improving the end user experience, it also allows dealers to process more applications, improving their efficiency at the same time. Some customers want the convenience of conducting their business online and e-signatures benefits them and the dealers.
The Equiniti Core Pancredit platform is used by many Motor Finance companies, and integrates with virtually any car dealer’s sales systems, including the popular Nexus and Codeweaver systems.
Our solution includes electronic signature for real-time point of sale applications which have allowed dealers to process loan approvals in only a few minutes. A typical customer can now expect to drive their new car off the forecourt within two hours. With e-signatures making it easier for dealers who want simple lending solutions, and for customers who want to complete the process online or remotely, this technology is expected to continue to grow in the future.