April 13, 2021
By Catherine York Powers
As the pandemic turned the world on its head, auto finance companies have been forced to digitize their services. To complicate matters, Deloitte reported that in 2020, 75% of borrowers refinanced with a lender unrelated to their current servicer (across all asset types). Servicers will need to re-examine their retention strategy and consider how customer-facing, interactive customer portals can address changing consumer preferences, create stickier relationships, and personalize upsell features to drive conversion.
As digital loan origination has accelerated, consumers’ demand for ease and convenience throughout the entire loan/lease lifecycle has never been greater. With over 60% of borrowers making loan payments on their servicer’s website, servicers are missing an opportunity to personalize and better time upsell offers, expand hardship relief options, and deepen the customer connection.
So how can auto finance companies modernize their loan servicing, drive down costs, shorten fulfillment queues, and mitigate errors - while putting the customer first?
Consider implementing these strategies:
- Adopt flexible technology that works with your current systems: Competition from fintechs is stiffening as these players challenge the industry with transparent and digital user experiences. Consider adopting customer-facing solutions that automate repetitive, time-consuming manual tasks that create friction with your customers - and that may be prone to human error and compliance risks. By allowing borrowers to self serve, you can shorten your fulfillment queue and empower your team to focus on the most complex customer needs. Consider cloud-based solutions that work with your current infrastructure and leverage the core systems you already have in place.
- Take small steps that have a big impact: It may be tempting to take a huge leap toward your goals by, for example, spending your entire budget on a new suite of technology tools. However, taking small steps with a customer-centric focus is a good way to get started. Out-of-the-box solutions that hyper-personalize the loan servicing or loss mitigation experience can make your customers feel truly taken care of - and boost retention. Digital tools that identify new products your customers may need and display them at optimal times can improve conversion rates. Any of these steps could be a great way to get started tackling your goals.
- You don’t have to do everything yourself: Savvy companies already know that finding a trusted partner to take on aspects of their business can bring cost and efficiency advantages. Needless to say, your partner should be a subject-matter expert so they can do the job better and faster than if you were to do it in-house. As with digital customer portals, you can meet changing customer expectations, unlock huge productivity gains, and accelerate your technology roadmap.
- Prepare for the future: The end of the pandemic may seem in sight, but we’re not out of the woods yet. Many families need extended hardship assistance while others will be looking for new financial products. Deploying customizable technology that allows you to track and respond to the needs of both populations can deepen customer relationships and improve portfolio performance.
With changing market conditions such as volatile loan loss projections and increased consumer protection scrutiny, auto finance companies need to serve dynamic customer needs while mitigating errors and customer harm.
Delight Your Customers with Constant AI
Now more than ever, customers want to feel that they’re an auto finance company’s top priority. Constant AI helps empower your customers with smart tools to proactively manage their loans or leases - and financial wellness. Our digital servicing solution goes beyond basic loan payments. Borrowers can access a full menu of loan-related options to:
- Adopt new products
- Seek payment assistance or workout options, and
- Increase financial literacy
All of these options are now available in the digital, customer portals from Constant AI. Plus, our intelligent automation gets rid of manual, paper-based approaches that can frustrate your customers and hamper employee productivity. With Constant AI, you can future-proof your digital strategy, stay ahead of market needs, and use every opportunity to build loyalty - without replacing core or other existing platforms.