Auto Finance – The Need for Speed Is Growing

The Need for Speed

Automobile finance lenders face market pressures to expedite the lending process and improve the customer experience to remain competitive. Streamlining the underwiring process can also benefit lenders through lower operating costs. There are often stipulations set and additional documentation required from applicants that slows the process and adds to the cost. However, these stipulations are often set based on a policy that doesn’t consider the true risk of loan default.

Walking the Tightrope

Think of getting from application to approved and funded auto loan as a tightrope. The faster you travel, the more risk you may become unsteady and fall. Having a safety net below, gives you the confidence to walk faster. That’s how we think about digitizing and automating the auto lending process. You should be able to streamline the underwriting process by assessing the early payment default and fraud risk of each application up front in the process. This provides your safety net. Applications that can be underwritten quickly with little to no risk of early payment default or fraud can avoid the cost and hassle of added stipulations, and be funded quickly, making borrowers and dealers happy.

Only a fraction (typically 10% or less) of loan applications have significant risk for early payment default (EPD), material misrepresentation, or fraud and only those applicants truly require the added scrutiny of stipulations and documentation. This enables your team to prioritize the cost and time for more thorough reviews only on the applications that need it and makes the overall underwriting group more efficient.

Introducing AutoPass – Walk Faster with a Safety Net

AutoPass specifically addresses both streamlining the underwriting of non-risky loans and directing loan application with true material misrepresentation or fraud for a comprehensive review. Knowing precisely which applications must have a fraud review is critical to achieving the goal of confidently automating parts of the underwriting process. The result: underwriting cost reduction, reduced losses, faster turnaround, and more profitable loans.

AutoPass provides quantifiable benefits, including:

  • Decreasing the cost of underwriting
  • Speeding the underwriting process for the vast majority of loans; improving the customer experience
  • Cutting losses by identifying high-risk applications for stipulations or additional review
  • Identifying the top 10% of applications that, if booked, result in 50% or more of losses

AutoPass uses artificial intelligence to deliver clear recommendations on which applications require stipulations and/or fraud review. It helps lenders determine real fraud and early payment default risk on auto loan applications. Applications are rank ordered based on the statistical probability that the application contains fraud or one or more material misrepresentations that are likely to result in a severe delinquency or default.

AutoPass leverages historical application and loan performance data in combination with the nation’s largest data repositories, third-party online behavioral data, and Point Predictive Consortium data to accurately identify fraud with low false-positive rates. Risk indicators are output in a AutoPass report your team can use to prioritize the review process.

Become the Lender of Choice for Borrowers and Dealers

The report speeds up underwriting by providing a comprehensive yet concise understanding of each application’s risk. In addition to the report, all AutoPass data is returned to you digitally so it can be used to automatically route cases based on the risk level of the application. With AutoPass you get from application to funded loan quicker with a sophisticated safety net protecting you from fraud and EPD. Faster, digital auto lending will make you the first choice among consumers and dealers.