How to leverage digital transformation to improve auto financing processes — Jenn Reid | Wolters Kluwer

The auto retail industry is undergoing unprecedented digital transformation and technological innovation. More than ever, customers looking to buy a new or used car will spend time online researching offers and auto financing choices. Because of this, your dealership must use eContracting and digital document processing tools to connect the buyer’s online and in-store experiences. Joining us in the studio to further discuss digital document processes and compliance is Jenn Reid, Head of Sales for Wolters Kluwer.

The COVID pandemic has brought significant changes to the industry, and retailers are looking for ways to prepare for digital transformation and become more accustomed to modern retailing processes. Reid says the industry has made great strides but is now really focusing on document-processing compliance, whereas the pandemic focused more on the customer experience.

Entering a truly digital experience will take more, including improving back-office processes. Reid says the changes must occur at more than just the dealerships, including tech and lending platforms.

Right now, the industry is looking toward automation and seeing more sophistication coming into the process. Reid says more dealers are using process automation in an end-to-end fashion. According to Reid, digitization is impacting all areas of the business, and now the industry is leaning into the compliance part of the processes.

Reid says some issues involve e-signed documents and how dealers and lenders can verify those documents. There is a need to ensure the signature is compliant and that it’s an authoritative copy. She says the rules around destruction and digital copy storage are a whole new world for the industry, and figuring out how to help the industry improve those processes is a focus for her company.

Many dealers want to know why all processes can’t move to a digital format and how they can make that happen quickly and efficiently. Reid says dealers can use tools and partnerships to get there. Reid says her company conducted a survey that found that 82% of dealers have implemented some form of digital process in their showroom. The survey also found that 84% of respondents will continue investing in digital strategy in the future.

Reid says the lines between digital and physical retailing are blurring. She says customers are looking for that digital experience, but the industry has a long way to go. Reid says they’re focusing on the conversion of paper to digital assets and the management of the process in a compliant way.

Reid believes it’s an unprecedented time for partnerships, and a lot of what slowed the growth of the ecosystem was fragmentation. Now, the industry can start to connect the pieces. However, she says it will take work to learn how to manage a digital ecosystem end-to-end. Partnerships are one way the industry can get there.

Furthermore, if dealers don’t get on board with digitization now, they could be left behind. She points out that statistics show that upwards of 25-30% of consumers have purchased a vehicle through a digital platform. She says that growth happened over only two years.

Dealers should be investigating different forms of auto financing. The industry is seeing more direct-to-consumer financing, especially in the EV space. Reid says dealers need to look at the options for auto financing within that model that can include the participation of both the dealer and the lender.

She also says dealers need to pay close attention to the eContracting piece of their business. She says lenders spend time and energy investing in a digital experience, and dealers need to do the same. They should ask themselves if their processes are compliant and have the right things in place to optimize the digital experience for consumers.

Reid says auto financing solutions will continue to be essential for dealers as they look to optimize their digital transition. She also says that dealers can’t lose sight of the compliance part as they make this transition.

“We’re in an ecosystem that’s always going to be under a lot of scrutiny,” she says. There’s an opportunity to make changes in the digital space, but Reid says dealers need to move forward mindfully so they don’t make investments and then wind up in trouble down the road.

If you ask Reid what percentage of dealer transactions will be purely digital in the next ten years, her answer is, “we’re going all in.”

“If you look at the acceleration, you see the investments, you see the efficiency, you know, and what it does to drive a business by having this type of sort of digitization, I think we’re going there. I really do,” she says. “Cars are getting delivered to driveways, and consumers are doing it online.”

The missing piece is getting the back-end process in line because all the processes throughout the journey must be stitched together seamlessly. The tracking and audit processes need to be included in the transition. “Financial assets being passed between different companies, that’s what still needs to come together,” according to Reid.

All in all, the industry has come a long way. However, she says the “baton-passing” between the consumer, the lender, the dealer, and the OEMs are significant in this transformation. She says Wolters Kluwer is working to find solutions to help solve that issue. “Companies are focusing on the front-end experience, but we really want to be a partner for the back end.”

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