THROW THE BABY OUT WITH THE BATH WATER (PART 9: LENDERS TO VENDERS)

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What should lenders still be thinking about or prioritizing when approaching this subject?

defi SOLUTIONS Speakers:
Charles Sutherland, Chief Strategy Officer
Scott Hendriks, Dir. Product Strategy and Product Management
Christian Wilcoxson, Solutions Engineer

This presentation is a part of AFSA’s Business Partner webinar series, which allows industry experts to share timely educational topics directly with AFSA members. Charles facilitates a “fireside chat” between Christian (playing the role of the client advocate) and Scott (speaking as the vendor technology provider community at large). This transcript has been edited for clarity and brevity.

Scott: I think it comes down to a couple of things. I think the first is what’s the provider’s philosophy on how instrumental their product is in driving the business, versus how flexible the product is to the business?

I think to Christian’s point unpacking the parts of … using that word configurable … unpacking that to say really where in the system do we have the flexibility to do what we need to do to run our business? That’s a prioritization decision. It really comes down to, again, understanding the fundamental need for us to be able, as a lender, understand what their fundamental need is to continue to grow the business in the way in which they want to grow it and identifying the areas that that particular provider has synergy with what the lender’s approach really is relative to capitalizing on those market aspects that make them unique.

Then I think you have to look at the vendor’s ability to deliver on those commitments. That’s a big part of this.

Lip service is good. But if you look at most providers, they’re using a lot of the same words in marketing themselves. And really understanding, at the end of the day what aspects of that provider make them different from the others that are out in the field. And understanding how that translates to success when it comes to delivering products on time that meet the need that was expected upfront.

Charles: Christian, if you were to think of a couple piercing questions that you would, hopefully, want to hear from lenders on this topic. Well, what do you think they should be?

Christian: I actually think the first question is an internal question for the lender, which is what is their primary business focus and what does growth look like for them over the next three, five, eight years, whatever the case may be? Because that’s going to drive a lot of the other questions that they need to ask as they start to go into the cycle and this process of buy versus build or bringing together components of both.

Once they figure that out, then it starts to come down to reaching out to the different vendors they’re speaking with and understanding, how does their roadmap fit into that lender’s desire for growth? And maybe they’re trying to get more digital ensuring that what’s coming down the pipeline for their vendor accommodates that strategy?

What do enhancements look like? If I do need to have something added into the platform, is it something that I can go in and configure myself? Is it something that I need to have built by the vendor? That’s a big part of driving the decision as well.

And one of the other pieces that I think more and more lenders are starting to ask, I didn’t see it as often when I first started having a lot of these conversations, is really understanding that you will have different skillsets and personnel working within a platform. And leaders are becoming more mindful and starting to ask, “Okay, well, what is the ease of use for that skillset?”

And what I mean is if I stick to the automotive finance space, I may have somebody who’s in charge of my dealer network and relationships, what is them logging into the system to manage the actual dealer records and that look like, versus somebody on the risk side who may be logging in to look at my programs and make those types of updates, versus IT who may be coming in to hook into a new integration or make some sort of complex calculation within the platform?

Those are really a lot of the very core questions that lenders either are starting to ask or should be asking as they really start to assess the platforms that are available out there.

Charles: I wholeheartedly agree with you on those. And I think that there’s optimistic signs that we’re seeing that.

Part 10: Does “Throw the Baby Out With the Bath Water” still mean the same it did at the beginning of this conversation?

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