VIEWPOINT: Enhancing credit approaches to boost conversion and dealer loyalty
If lenders are the heart, dealers are the arteries through which the lifeblood of auto finance flows. They are driven by a simple incentive: to sell vehicles as efficiently as possible. Lenders that can enable this, while maintaining transparency and rewarding their dealers appropriately, can earn genuine loyalty.
Alfa Systems is an open platform, built on a foundation of configurable flexibility. This article explores how these principles can deliver an elevated dealer and customer experience, in turn driving lender performance.
1. Driving more, higher-quality automated decisions
Automated credit decisioning is a well established and successful part of the process, but historically it is based on conventional, structured sources of credit data. Although these data sources are familiar and effective, there are invariably some customer types that aren’t well represented, and fall through the cracks as a result.
The answer to this has often come in the form of stipulations. Stipulations are a useful way of adhering to risk policy while getting the deal done, but they can become cumbersome; they require manual processing, documentation, and follow-up - negating the efficiency gains of automation, while adding complexity for both lenders and customers.
Lenders willing to use alternative data and the latest technologies can capture this corner of the market more effectively. For example, they can use alternative data to look beyond a thin credit file and find otherwise hidden pockets of creditworthy customers. They are more likely to convert the business than a lender that requires additional documentation.
Similarly, lenders willing to embrace new technologies - such as using Large Language Models to identify subtleties quickly - can make more informed decisions more quickly, thereby protecting risk profiles and reducing operational overhead.
Alfa Systems is an open platform, allowing our customers to fold alternative data sources and new technologies into their originations processes.
Intelligent workflow allows the configuration of when such services are invoked, such as when conventional customer data sources may come up short.
2. Enabling dealer self-service
Providing dealers with self-service options can provide instant feedback, reduce operational overhead, and allow more to happen outside business hours.
Self-service tasks can range from fetching simple status updates for an application, all the way to providing sophisticated optionality for automatic rehash and other operations. Understanding your dealers’ most valuable use cases is important, and ensures optimal cost benefit.
Achieving this starts with an API-driven architecture that can receive dealer requests and provide responses in real time. However, such requests should also trigger intelligent, configurable component processes. This allows not only the chaining of multiple actions required to service a particular request (such as triggering a credit re-decision for a rehash request), but also the embedding of updatable rules that satisfy risk and compliance policies.
Using configuration (as opposed to code) for this business logic allows for all applicable improvements, maintenance, and expansion - and eliminates expensive custom code development.
Alfa Systems provides an intelligent, fully configurable workflow and business rules engine that allows our customers to configure a variety of processes, including those that support automated self-service processing.
Integration webhooks can be embedded into such processes, allowing for the orchestration of communication to other systems, including the dealer.
3. Simplifying communications
Self-service is a great option for immediate resolution, but some manual intervention and contact is inevitable. Offering flexibility around communication channels - whether that’s text, chatbot or phone - is a key step towards success, enabling the dealer to communicate on their terms, and making sure those interactions don’t become a chore.
Omnicommunication channels are only as good as their outputs, so this is only half of the battle: it’s also critical to make sure each and every request is received by the right person or team. This can range from intelligent allocation of agents, based on a variety of parameters; ensuring certain dealers are routed to a specific group of relationship handling users; or reallocating overdue communications automatically to high-priority queues.
Regardless of the strategy chosen by a particular lender, this logic should also be easy to change as business conditions evolve.
Alfa Systems offers multichannel communications, including dealer texts. Its powerful workflow, business rule and work queue allocation engine ensures inbound communications reach the right destination, first time.
4. Acting with transparency, consistency, and flexibility
If there’s a lack of transparency and consistency from the lender, it can create confusion, increase manual intervention and distrust, and ultimately hurt the relationship.
Offering clarity around approval terms, especially when alternative offers or structures are proposed, is critical to the dealer’s understanding of the lender's position on a given credit application. This can directly influence a dealer’s ability to contract efficiently. The same is true for commission; maintaining the dealer reserve amount consistently from offer to payout avoids surprises and increases trust.
Alfa Systems features a granular pricing engine that is invoked consistently throughout the originations process, from bulletin generation, to offer, to contract validation. A comprehensive offer and contract history is invoked through the contracting process, ensuring consistency from start to finish.
Originations in Alfa Systems covers direct and indirect lending, from quoting to funding.
Representing an integrated part of the Alfa Systems platform, it allows customers to take advantage of Alfa Systems’ total capability.
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Alfa’s experience delivering efficient operations to complex top-tier lenders means we’re well placed to guide you in achieving your goals around originations, servicing, collections and beyond.
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