The combination of cloud, wireless, and mobile technologies have created consumer expectations of convenient commerce. Business transactions that once could only be accomplished sitting at a desk with a computer wired to a network are now handled anywhere with high-speed network connectivity. Nearly every business must now support mobile transactions. Failure to do so virtually guarantees a loss of market share.
Let’s take a look at the reasons mobile is a must for auto lenders, and the benefits that come with it.
Apply-Anywhere Auto Loans
Blame it on technology, but dealerships today have far less control of the sales process than they did a decade ago. Auto buyers research vehicle information online. In years past, buyers typically made multiple visits to a dealership. Today the average is slightly more than 1 visit. It’s inevitable that buyers will soon conduct the entire process—research, selection, financing, and purchase—via mobile.
Auto lenders need to embrace the mobile opportunity. It’s not just a matter of riding a trend. Mobile gives lenders an additional channel to capture loan applications from millenials and consumers with limited banking relationships—two groups which are both poised for growth.
Preferred by Millennials
Millennial users are mobile-savvy. Just think of Amazon Mobile, Uber, Airbnb, and nearly any other business that minimizes transaction friction with mobile applications. Despite the plateau of 2018 vehicle sales, millennials make up a significant portion of new car sales. Millennials expect to do business via mobile devices. If you’re not giving them the opportunity to apply for auto loans via mobile, you’re missing a promising growth opportunity.
Unbanked and Underbanked Consumer Opportunities
Unbanked and underbanked consumers also present significant opportunities for auto lenders, particularly for those who focus on the subprime market segments. The 2017 FDIC National Survey of Unbanked and Underbanked Households indicates mobile phone usage is far greater than you might imagine for these groups:
- 49.5 percent of unbanked households own or have regular smartphone access; and
- 83.2 percent of underbanked households own or have regular smartphone access.
Surprisingly, as shown in the data below, the report finds that underbanked households are more likely to have access to smartphones and to use mobile banking than fully-banked households. For the unbanked and underbanked market segments, a portion of which do not have internet access at home, a smartphone is the prime means to participate.
Mobile Phone, Smartphone and Home Internet Access by Banking Status and Year
Here, just as with millennials, apply-anywhere auto loans via mobile present a tremendous opportunity for lenders who want to grow their portfolio. A mobile strategy is essential for lenders who focus on the subprime segment.
Mobile Requires The Latest Fintech Capabilities
Lenders who already support online auto loan applications should not assume their web-based loan application process will also provide an easy-to-use mobile auto loan application process. If your internet loan application process was designed years ago, you’ll need to design your mobile application using the latest fintech capabilities. Through configuration, not coding, a modern loan origination solution significantly shortens the creation of a mobile loan application process optimized for mobile devices. Configuration lets lenders:
- Use a WYSIWYG environment to select forms, and arrange fields, text prompts, images, and buttons to create the user interface;
- Apply display logic to smoothly guide applicants through the auto loan application process. Use custom drop-down menus, data masking, rules, minimum values, maximum values, and integration with external data sources to ensure an accurate and efficient application process; and
- Test the application on simulated mobile devices to optimize process flow and assess overall usability before “going live.”
Configuration menus enable you to quickly tailor the mobile auto loan application process to the unique needs of your market segments. Configuration makes it easy to continually refine the process in response to market dynamics or changes in your lending strategy. For lenders currently unable to take advantage of the lending opportunities enabled by mobile devices, a configurable loan origination solution may be the quickest way to close this gap.
Apply-Anywhere Auto Loans: Mobile Means Opportunity
The growth of mobile commerce, an influential millennial generation, and unbanked and underbanked borrowers who prefer mobile internet connectivity are three compelling reasons for auto lenders to offer apply-anywhere auto loans. Mobile means opportunity. Without a mobile channel for auto loan applications, lenders are bypassing one of the most significant opportunities for growth in a highly competitive lending market.
defi SOLUTIONS, recognized as one of the Top 50 Most Promising Fintech Providers by CIO Review and one of the 50 Smartest Companies by Silicon Review provides solutions that enable lenders to provide apply-anywhere auto loans via mobile devices. Contact our team today or register for a demo of defi LOS.
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