The best people are always open to new ideas. They’re always learning. So, I like to bring in topics on other industries that I think you might learn a bit from. In this case, I learned that the auto industry is doing some interesting things that the mortgage industry might try.
I was told that Fiserv’s Automotive Loan Origination System (LOS) was used by dealers and lenders to process more than 13.6 million credit applications in 2013, an increase of 16.5 percent over the previous year. More than 4.6 million contracts were funded on Auto LOS – a 14.3 percent increase over 2012 — of which nearly 900,000 were electronic contracts (e-contracts). 2013 was the first full year that e-contracting capabilities were integrated into the company’s end-to-end solution for automotive loan origination.
This substantial volume of credit applications and funded contracts reflects the slow return to health of the U.S. automotive industry, which registered robust growth in sales and financing for both new and used cars and trucks. The growing adoption of e-contracting mirrors the automotive industry’s transition to new technology and digital lending. E-contracting systems enable auto dealers to submit an electronically signed contract to a lender, greatly reducing the time needed to approve and fund loans, minimizing errors and leading to improved customer satisfaction. Are you listening Mr. Mortgage Lender?
“Increasing automobile sales and the recovering economy contributed to the impressive growth of credit applications and contracts supported by our Automotive Loan Origination System,” said Kevin Collins, president, Lending Solutions, Fiserv. “Captives and their dealers realized the role that technology can play in reducing costs, improving customer satisfaction and facilitating faster decision-making. This led to the impressive volume gains and growing adoption of e-contracting processes.”
By using e-contracting through Automotive LOS from Fiserv, auto dealers have been able to realize same-day or next-day funding and approval of contracts, a significant improvement over the laborious and slow paper-based contract process.
Fiserv technology gives lenders access to tools that help them better understand their borrowers’ financial situation, and offers a holistic view of their entire lending portfolios so they can make smarter lending decisions and close more deals. The efficient and error-free execution of e-contracts helps lenders reduce costs by eliminating paper, deliver high-quality service and remain competitive in today’s auto finance market.
Fiserv’s Automotive Loan Origination System is a solution for automotive loan origination, from electronic application capture through credit processing, funding verification, validation and booking of new loans and leases. The system assures a fast and efficient origination process, enforces compliance, mitigates risk and promotes profitable growth by lowering processing costs without sacrificing quality for quantity.
Mortgage lenders just might learn a thing or two from what these auto lenders are doing in my humble opinion.
About The Author
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at email@example.com.