Why Your Digital Auto Lending Architecture Matters More Than Ever

Loan Origination Automation: A Business Case for Adopting Better Lending Technology

What does building the International Space Station (ISS) and developing an end-to-end auto loan service have in common? Quite a lot, actually. The Chief Product Manager of defi SOLUTIONS, Dave Murray, began his career as an aerospace engineer who was involved in building the ISS. To work successfully, the development of such a complex structure needed to be broken down into its various components. Each element of the space station was handled by subcontractors working in silos, though the primary contractor with whom Murray worked needed to view the project holistically. 

It could be argued that developing auto lending software is as complex as building the ISS. Understanding how all facets of a project must work together is just as crucial in auto lending as for the aerospace industry. The auto lending sector is moving increasingly towards such end-to-end solutions, with digital auto lending architecture playing a significant role in ensuring all aspects of a lender’s platform work seamlessly together.   

This holistic, end-to-end outlook on auto lending is exactly where defi SOLUTIONS comes in. With experience working with lenders of every size, the company’s technology supports loan origination and servicing, along with back-office operations, while also providing experienced personnel to support business process outsourcing (BPO) arrangements.


Going Digital: An Auto Lending Architecture Revolution


Digital solutions make doing business easier for both lenders and borrowers. As with other aspects of the finance industry, the digital transformation of auto lending has simplified the process of buying or leasing, financing, and servicing loans or leases. New digital tools help consumers when shopping for vehicles, creating a better understanding of vehicle values and market rates. Now potential car buyers can check the prices paid for specific vehicle models while also comparing rates online. 

Meanwhile, digital channels and tools of the digital revolution have enabled lenders to focus on customer experience. Auto lenders are increasingly looking toward financial technology (fintech) to make the whole lending process easier and more convenient for borrowers. Driven by advances in fintech, lenders are adjusting how they structure originations, servicing, and other aspects of a loan’s lifecycle to create a friendlier user experience. Such digital tools help lenders better evaluate risks to measure aspects like creditworthiness and discourage fraud. Additionally, technology now delivers real-time data analysis to condense and elucidate the loan application process.  

Partnerships between lenders and fintech providers are also driving the development of digital auto lending architecture. Often lenders work in conjunction with BPO providers to more efficiently provide services for lenders’ customers as well as improve the efficiency of back-office functions. For example, in addition to providing trained customer care or technical staff, an outsourcing company might also provide a unified software platform in which these personnel are trained.


Digital Auto Lending Architecture to Support Customer Experience


These days it’s not just enough to have software applications that enable the gathering of information. Automation needs to support a better overall borrower experience, whether by helping consumers engage directly with lenders or through modernizing administrative functions. When using a lender’s digital auto lending architecture, consumers want a system that’s intuitive to use.   

By unifying their approach to digital solutions, lenders will also optimize administrative efficiencies. Though consumers won’t see these changes directly, they will benefit from the efficiency it creates. Quicker underwritings and greater clarity on loan conditions result in a better experience for the borrower. 

Modernizing digital auto lending architecture additionally supports lease or loan servicing, which includes management of collateral, account administration, default management, and customer care. 

Lease or loan servicing functions that benefit from automation include:

  • Account closeouts
  • Automating workflow tools
  • Collections management
  • Customer fulfillment
  • General ledger maintenance
  • Identifying and managing complaints
  • Payment posting
  • End of Lease or Loan
  • Remarketing of vehicles
  • Repossessions
  • Title management
  • Workforce engagement management

By streamlining access permissions, lenders can configure their digital auto lending architecture to manage service activity within a single platform. Unifying digital systems allows lenders to better handle changes to business processes, making them more agile. This also helps with workflow, eliminating the need for manual inputs while also decreasing training times and improving employee efficiency.

Flexibility of the Cloud

Digital legacy lending systems are largely being replaced by modern cloud-based systems. This is the case with most industries, and auto lending is no different. Cloud computing offers auto lenders greater flexibility, allowing them to scale services according to their needs. 

Cloud-based platforms make it easier for lenders to upgrade or introduce new software applications or technologies. Software applications based in the cloud are also much easier to deploy. This configurability allows lenders to take advantage of multiple digital tools while significantly increasing data storage capabilities. 

Mobile Capabilities

Software applications for mobile devices have become a boon for many businesses, both large and small. Being able to apply for a loan or lease from anywhere promotes a more positive user experience. Incorporating mobile origination solutions into digital auto lending architecture offers lenders a significant advantage over competitors that will help expand reach and greatly enhance capabilities.  

Mobile loan or lease originations help lenders:

  • Automate workflow, decision-making, and loan structuring to consistently accelerate applicant evaluations, return credit decisions in a timeous manner and apply credit policies. 
  • Enable integration with services that ensure applicants present information accurately, including identity verification, fraud analytics, and vehicle valuations. 
  • Make designs responsive to support access from both a mobile device and a personal computer (PC).
  • Tailor the process to create unique experiences for borrowers. 

Using digital auto lending architecture that integrates with a lender’s current systems gives lenders greater flexibility, enabling them to scale services provided by third parties. The ability to easily configure such automated tools gives consumers access to a wide array of both standard and extra services while also enabling lenders to continually refine their mobile offerings. 

Advancing New Concepts

A lender’s digital auto lending architecture also needs to be flexible enough that it can adjust to changes within the market. For example, the demand for financing electric vehicles will grow rapidly over the next decade as vehicle manufacturers develop this technology. Consumers may then look at purchasing features like batteries that offer extended life, greater torque capabilities, or new entertainment features that would trigger changes to loans or leases.

These changes require digital auto lending architecture that links servicing to originations. It would allow the lender to review a borrower’s inputted details from the original application and automatically apply this data to adjust the terms of the initial loan agreement. This offers lenders new potential revenue streams to sell add-on services to their customers at any point during the loan’s lifecycle.  


A Combined Solution: BPO & End-to-End Lending Services



An end-to-end approach to loan servicing allows lenders to utilize a single provider for all phases of the lease or loan lifecycle. A truly innovative solution also offers lenders the option of outsourcing all or a portion of their servicing operation.

By outsourcing to a team using the servicing systems their teams have developed, and their experts run day in and day out, lenders can get up and running in no time, saving their team hours normally spent on implementation, and satisfying their customers with white-label, white-glove services more quickly.

Working with a single source origination, servicing, and BPO partner is easier than working with multiple vendors. By utilizing one provider to supply end-to-end fintech solutions and related services, lenders can provide a more seamless customer experience. This leads to satisfied customers who are more likely to return to the lender for services in the future. 

Digitizing BPO Lending Services

Lenders can save by outsourcing critical technological systems to design a comprehensive plan or, for lenders with sufficient IT capabilities, to serve borrowers’ needs on an ad hoc basis. Outsourcing helps save on labor costs, minimizes requirements for office space, lessens the need for technological infrastructure, and helps lenders with other tasks that aren’t part of their core functions.  

Outsourcing also allows lenders to scale services according to their needs. BPO partners often bring cutting-edge technology to the table as well. A BPO provider tasked with developing a lender’s digital auto lending architecture should optimally have extensive experience in the lending industry, especially regarding the development of end-to-end lending solutions. 

BPO partners should be able to provide technology that helps with:

  • Loan and lease support services: Lenders can leverage a BPO provider’s technology to support customer care, payment processing, and other services in either an end-to-end or a la carte manner rather than building these capabilities from scratch. Automation also helps lenders gather data to create metrics on their portfolios and identify areas for potential improvements.
  • Lease maturity management: Automated BPO solutions help lenders reduce costs and streamline the processing of leases, creating a smoother transition for their customers while improving retention. 
  • Backup servicing: When needs for customer care or other services spike, a BPO provider that can support these needs using a market-proven software platform with real-time data capabilities will ensure greater flexibility.
  • Remarketing: Engaging a BPO provider that continuously invests in forward-thinking technology allows lenders to open up new internet sales channels, boost competitive bidding, streamline inventory management, monitor auction expenses, and keep accurate records of vehicles throughout the remarketing process.

When it comes to providing cloud-based originations, servicing, and other BPO services, defi SOLUTIONS capabilities are unsurpassed. This allows us to easily scale lenders’ services to meet the needs of our clients. 

Benefits of Digitizing End-to-End Lending Services



Digital end-to-end lending solutions must comprehensively satisfy borrowers’ needs. Not only do these digital solutions need to be easy to use, but they should also ideally enhance speed, promote trust and provide value to lenders’ customers. Digitalization must also focus on integrating software and hardware into systems that support all stages of a loan’s lifecycle. Above all, it must ease the relationship between lenders and borrowers by encouraging productive communications, even when handling situations that strain this relationship, such as delinquencies or repossessions. 

The benefits of end-to-end lending technology include: 

  • Allowing changes to be handled more quickly and efficiently. 
  • Creating better experiences for consumers by building loyalty that leads to more repeat business. 
  • Enabling lenders to look from a consumer’s perspective to understand and deliver what borrowers want. 
  • Facilitating understanding of how borrowers or lessees use vehicles after leaving the lot, which leads to possible provision of additional services. 
  • Permitting lenders to concentrate on core competencies rather than piecing together end-to-end solutions through multiple vendors. 
  • Standardizing tools so that lenders can more effectively conduct business.   
  • Supporting efficiency throughout a loan’s lifecycle through the use of unified platforms, a singular code base, coordination between teams, and other elements of end-to-end digital solutions. 

As lenders concentrate on end-to-end solutions, defi SOLUTIONS too looks to strategically align our products and services with this holistic view in mind. While seeking a greater understanding of what lenders want, we proactively look at what lenders need. 


Getting Started


defi SOLUTIONS provides configurable loan origination systems, loan management and serving, analytics and reporting, and a wide range of technology-enabled BPO services. To learn more about how we can integrate our end-to-end solutions into your current digital auto lending architecture and start realizing the benefits of modern technology, contact our team or register for a demo today.

Contact Us
(Visited 40 times, 1 visits today)