“Our main goal is to offer the dealer and customer the same level of experience they would receive when transacting on a single lender platform, but with the benefits and flexibility of the multi-lender platform we provide.”
Insightive.tv: Can you begin by giving an overview of your customer contracting process — how do new individuals or businesses get onboard?
Lee: The starting point for the customer journey is generally their visit to the motor dealer, although this initiation is increasingly moving to the dealer’s website. Regardless, the dealer is the predominate facilitator of the customer’s journey.
The dealer or the customer completes a finance application that then comes to us. If that occurs in the showroom, the dealer utilises a program called “DealerZone” that enables them to quote all of our products to the customer. More recently, we have developed technology that is embedded into the dealer’s website that allows the customer to directly glean much of the information available on DealerZone and initiate the transaction themselves.
These applications then come onto our internal system where algorithms are used to pair a customer with one of the twenty-seven different lending agencies we have on our panel. The transaction is typically completed when the customer goes to pick up their vehicle, although it can sometimes be completed online. We also have a call centre, because some of our customers prefer a human touch. But we find that many of them want this process to be automated. Because we want to cater to our customer’s needs, we make both options available.
Insightive.tv: Is this differentiated from other services offered in the industry — how long have you offered this digital contracting?
Lee: Most financial applications in the showroom have been done over the internet for a number of years. That is pretty standard within the industry. Dealers use several different financiers for their customers. The primary lender is generally the car manufacturer and then a major independent line such as Blackhorse. A dealer typically puts the customer on their systems and gets an auto approval or decline.
If the primary lenders decline a loan, the customer will look to a broker like ourselves. The broker journey has, typically, been more cumbersome and fractured — involving manual intervention. The dealer may still fax that process to the broker. The number of processes often means the approval process will take days.
We are completely different from that. The dealer puts the application on DealerZone and the program directly pulls data from the credit reference agencies while algorithms compare that data with other customers, transactions and purchase histories. Once the customer is segmented into the right category, another piece of software — Navigate — take that customer, and their credit profile, and automates that transaction with one of our twenty-seven lenders. That is completely unique. No other broker does that in the market.
We take a much more holistic approach that requires a broader set of channels, and we use these different channels for different parts of the process.
Insightive.tv: What are some of the challenges you have faced in building this system?
Lee: The challenge is working with 27 different banking institutions that typically outsource their technology journey and are at varying degrees of automating their processes. Some are fantastic and really understand that the customer journey is changing and help us facilitate that, but that is not universally true.
E-sign is a good example of this. We have had to create an e-sign hub within the DealerZone platform that can integrate with the various third-party providers used to complete that transaction. This was necessary because different lenders use different providers, such as Bonafidee or Dealflo, and companies like Barclaycard have their own system altogether.
We have several technology partners, but we typically build everything in-house. We look at this as a competitive advantage — the more we do in-house, and the more we can embed our own technology into our processes, the better we become. Building programs like our e-sign hub that are capable of integrating with the other available technology is key to what we do.
Insightive.tv: What are the main outcomes you hope to achieve?
Lee: A lot of it comes down to the speed of the transaction. Offering dealer partners and customers a fast decision allows customers to generally complete the transaction in one visit to the showroom. Other systems might require two or three trips.
Our main goal is to offer the dealer and customer the same level of experience they would receive when transacting on a single lender platform, but with the benefits and flexibility of the multi-lender platform we provide.
Compliance is another consideration for us. As a broker, we have to evidence that we have achieved the best outcome for our customers — this is both a regulatory and moral requirement for anyone in our business. One of the advantages of algorithms is that they do exactly what you tell them to do, and they prioritise exactly what you tell them to prioritise. We put the customer’s outcome at the forefront of the transaction, and our commission at the bottom end. We can demonstrate, in our code, this customer priority — something that is helpful to anyone operating in our industry.
It’s all about added value. If you look at customer feedback, they do mention that meeting the Credit Committee is one of the highlights of their experience — I have no ambition to digitise that because it would be diluting our value proposition regardless of efficiency.
Insightive.tv: How do you see the market changing?
Lee: One of the more recent developments we have made is to help dealers bring the finance journey forward to their websites. To do this we have created embedded finance calculators that allow customers to not only see the price of the car, but how much it costs per month — allowing the customer to play around with the dynamics of that deal and explore monthly and total costs with different payment schemes and borrowing times. We then allow them to initiate the transaction on the website. These kinds of services are fairly new. We are one of the only companies to offer that sort of solution to dealers.
This is part of a wider trend you see across industries — the customer journey is moving progressively online. Customers want to engage with finance and apply for finance further up-stream. Typically, the customer only wants to visit the showroom once, and they want to know that they will be approved for finance before they make that trip. We have developed a pre-screening credit tool that allows customers to tell if they are eligible for finance or not. This allows a customer good insight into what type of loan will be available to them before they go shopping.
This process also generates a strong profile lead for the dealer and gives them some information on the customer in terms of their creditworthiness. We have deployed that system with several dealers so far and it has definitely added value.
The journey is changing up-stream and I think we will continue to see customer transitioning to transacting online. In regards to the dealer, it is all about streamlining that process to get the decision over to the customer and dealer as quickly as possible.
Lee Streets is Director at Evolution Funding. With two decades of experience working in motor finance and expertise in new business development, sales management and operations, Lee has brought innovative enthusiasm to his position. He has been an instrumental member of the leadership team that oversaw the development of Evolution Funding’s unique, digital service proposition. We spoke with Lee to discuss the digital contracting process in place at Evolution Funding and gain insight into the future of auto-finance.
Evolution Funding is the largest motor finance intermediary in the UK. Founded in 2002, they offer hybrid finance solutions to car buyers through a network of third-party lenders and their own services. They bring the flexibility of a brokerage and the speed of unmediated loans directly into the showroom. Working with over 3,500 dealer partners, Evolution Funding is working to embed finance calculators and services into dealer websites — bringing access to the finance journey digitally up-steam. This innovation and service has gained the company continuing recognition — named F&I Broker of the Year (2015 and 2016), among other accolades.
THE DIGITAL FUTURE OF CUSTOMER CONTRACTING series