Alternative data’s impact on the automotive industry is heating up
Last month, DRN’s FinTech team attended the first annual Automotive Intelligence Summit (AIS), where we were also a proud sponsor of the event. The conference centered around technology and its effect on the automotive industry, bringing together professionals within the industry for three days to learn from their peers about the changes in the industry due to innovation and emerging technology. Here are some of our biggest takeaways from the event:
The importance of alternative data
Lenders rely on the internal data they already have to aide them in their collections process; however, most of them are currently facing information overload. There were many conversations in workshops and keynotes that centered around how you have all of the information you need to make right party contact at your fingertips, but the abundance of data makes it harder for you to get you what you need. Many lenders have found that layering in alternative data, such as LPR, is helping them narrow down exactly how they want to make contact and understand their loans better.
Using data to make decisions early in the loan cycle
Many lenders in our peer to peer session focused on the importance of behavior modeling. By layering in data they already have with external data from third party vendors, lenders are able to understand their borrowers better and predict their propensity to skip and/or reinstate the loan. Data can also help lenders identify the risks in their portfolio earlier, allowing them to work with their borrowers to mitigate these risks.
Take more risks
Joanna Sherry, VP of Strategy and Marketing at Southeast Toyota Finance, stated that in a risk adverse industry, the auto finance industry needs to start taking risks in order to continue success. Whether it’s layering in alternative data into the collections process or adopting new technology to help make workflows easier, the auto finance industry needs to start embracing the risks that could potentially turn into effective results.
Data is important to our industry. It helps prevent us from losing revenue and also helps us improve our relationships with borrowers. With the inaugural AIS in the past and as we all settle back into our workflows, I hope you are able to take what we’ve all learned at the conference and make effective changes in to our industry.
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