Auto FinanceINNOVATION AND DIGITAL TRANSFORMATION

THE ROAD AHEAD

GEORGINE MUNTZ |CFO AND STRATEGY LEADER | DEFI SOLUTIONS

Discussion Overview

1. The Environment – Industry, Trends, Driving Forces

2. Auto Finance – Where we fit it

3. Opportunities – Originations, Funding, Servicing

4. What Now? Have a strategy, make a plan, get started

Source – World Economic Forum: Future of Financial Services 2015 Report

Source – Andreessen Horowitz: Mobile: It Changes Everything – Slideshare

SMART @!! PHONE

DigitalImperativeNot a choice but a given and new entrants are using connectivity, automation and new data sources to solve customer pain.

Established players can protect their position but must be ready to collaborate and innovate.

“Any business in any era must be able to rapidly adjust to the ebb and flow of currents in its industry – or, better still, to anticipate and stay ahead of them.” – Future of Financials Services 2015 – World Economic Forum

“Financial institutions now find themselves faced with the same challenges as retailers: the customers and members they serve expect to use all of their digital devices to address their financial needs.” – The Financial Brand July 9,2015

WHERE DO WE FIT IN?

IT FEELS LIKE THIS…

Auto Finance – Our current situation…TRADITIONALLY LAGGING

Indirect Model – over 30,000 dealers, diverse, distributed and fragmented channel

Stable well defined products

Profitable – “if it ain’t broke…”

Established network, stable technology – DMS systems, portals, lender LOS, servicing systems

RECENT DESTABILIZING TRENDS

Direct growth, P2P, crowd funding, social media

Uber, Millennials, Facebook, Facetime, work from home, CFPB – Payday, Pricing impacts

Competition, low rates, new data access, new entrants with better technology

M&A DealerTrack, Google (self-driving car), new LOS players, easy to integrate portals

• Automation of decisions• Integration of data• Integration of all services (value guides, servicing data, history)• Text, email and social mediaOriginations

• Third party data• OCR and digital documents• eContracts, eSignatures• Text, email and social mediaVerifications

• Payment processing• Payment types and points (Apple Pay, PayNearMe, bitcoin)• Text, chat, email• Self service, retention, eTitlesServicing

• Increase automation, fewer people, more compliant• Eliminate time in process with integrated data• Improve accuracy, speed and consistency• Communicate electronically, quickly and compliantlyOriginations

• Integrate and collaborate with data providers• Create automation to check for compliance, rules, scoring• Electronically transfer data to contracts and systems• Communicate electronically with customers, dealers, vendorsVerifications

• Text and email with automation, fewer calls• Get payments frequently and in all types and locations• Communicate when and how the customer wants• Allow for self service, electronic documents, eSignatures/trackingServicing

What Now?

Where are your costs now?◦ Break into the 3 big groups (originations, funding, servicing)◦ Where does your cost stack up against others (benchmarking)?◦ Where is the pain, the bottleneck, the complaints?

Where can you get ahead of the competition?◦ Program◦ Service◦ Scale, losses, capital costs

Where can you get the most progress, fastest?◦ People◦ Technology◦ Process

Assess where you are and where your opportunity is greatest.

COMPLETE A STRATEGY

Make a PlanTechnology is moving fast, you have many options. Make your plan and get started.

Source: Accenture: The Future of Fintech and Banking, 2015 report.

Pick a Starting Point◦ Take your biggest opportunity area from your strategy review◦ Assign a leader, get it into the plan◦ Assess the options to collaborate and leverage technology

Set the Plan Now and Start◦ Timeline, team◦ Cost, process◦ Measure Success, efficiencies, ◦ Savings, compliance, results

THANK YOU!

QUESTIONS?