1. Strategy & Company Mission
The Fiserv value proposition is to lower a financial institution’s costs and increase their capabilities through the efficient delivery of complex technology and processing services that could not be affordably developed on their own.
As a result, Fiserv continues to focus on solutions and services we can develop and deliver that help the financial institutions – including those in the captive finance market – to increase their efficiency and build more loyalty within their customer base. In fact, one of our five values is ‘create with purpose’ — what can we do to help solve everyday problems for our clients and their customers?
For nearly three decades, Fiserv has provided comprehensive automotive finance software solutions and BPO services for captive finance companies, independent auto finance organizations and banks in North America. Using Fiserv services, auto lenders have been able to handle both unprecedented growth and survive the economic downturn.
We also believe that developing close partnerships with clients nurtures a high level of respect and trust and provides continuity, regardless of the products or services. And clients agree. They regard us as experts in managing portfolios of any size and value the ability to use Fiserv systems and resources to handle peaks and valleys in their portfolios.
The combined pressure of shrinking margins, new regulations and a sluggish economy has made efficiency absolutely necessary. And because Fiserv offers solutions in the broader lending arena – not just auto finance – we continually look at ways and have strategically invested to ensure that lenders and servicers are better able to balance operational efficiency with new channels, products and processes.
2. Marketing Objectives for 2013 & Beyond
There has been a significant increase in focus across Fiserv business lines on uncovering opportunities to improve the customer experience. To manage to the current landscape, are doing three things:
- Supporting compliance and regulatory requirements
- Creating a holistic view of the consumer
- Reducing redundant processes and services in our software
Having buyer information – and being able to analyze it – is becoming a daily activity for auto lenders. Because the data comes from application, closing and payment transactions, we’re encouraging clients to take a more integrated approach. In other words, we recommend they more tightly integrate their LOS with their servicing platform. Not only does this mean that all the analytical information starts in one database and stays in one database, but this approach also provides greater insight about the buyer’s credit worthiness and behavior. More and more, our clients are recognizing that buyer behavior has a huge effect on how they provide financing. And they’re looking to us as a technology provider to evaluate what’s going on relative to buyer expectations and translate those trends into system functionality.
We’re very excited about a new direction we’re taking with our technology offerings across the lending spectrum. We are currently working on an initiative that presents a new way to think about lending. Instead of massive and complex software systems, we’re developing more componentized functionality within a scalable framework. Common functions can be shared between departments. In other words, the function for requesting a credit report in originations is the same as the function used in loss mitigation. Our strategy is a whole new way to manage the lending process. The ultimate goal is to incorporate all your lending software into one delivery mechanism – even non-Fiserv components. This universal interface is designed to create a substantially better “lending experience.” It gives our clients a truly tailored user experience to meet their specific business needs and makes their entire lending operation more self-sufficient. Fiserv is committed to this direction, and is investing significantly in making it happen.
3. Market Opportunities Ahead in 2013
Because consumers can use more than one channel to find their next car – or their next car loan – we must continue to have a sense of urgency about making sure that every transaction counts. We see three key opportunities that impact the marketplace and allow the best use of lending technology:
- Third-party collaboration to offer seamless services
- eContracting and other digital lending initiatives, and
- Business process outsourcing
Web services incorporated into our platforms leverage the Internet for real-time information from virtually any application, using our LOS or Accounting System as the single point of access. This framework integrates other applications – for example, the dealer portals, the credit bureaus, LexisNexis, Kelley Blue Book – so they communicate with each other.
We use services from our partners and make the applications work together to help drive the lending process. And we don’t have to write new code to create these services. As a collective group, our business partners represent industry leaders on many fronts and, together, we give our clients a more efficient, more cost-effective lending environment. For instance, the risk management component of our LOS v5 processes electronic dealer ePortal credit requests through its integration to a number of loan application networks. This capability minimizes credit portfolio risk exposure for both the client and their dealers.
Besides that, we’re seeing some progress with paperless initiatives in the auto finance marketplace, but are still hoping for greater adoption of eContracting. Some clients aren’t ready to take the plunge but have at least started to roll out eValidation. That paperless component utilizes a dealer portal to automate contract data analysis, and it can be a good first step into eContracting. Even this single piece greatly reduces the time needed for loans to be approved and funded. The dealer network is a big winner with this too. While it can take as long as a week for a deal to be funded with a paper contract, dealers are realizing same-day or next-day funding due to the eValidation workflow. Having more deals close more quickly is great for the industry.
Finally, one thing that makes Fiserv unique is our ability to offer auto finance products and services through various delivery channels. Specifically, the Contact and Servicing Center from Fiserv—located in Amherst, NY—allows lenders to outsource selected business processes to achieve greater efficiencies and economies of scale. Fiserv combines deep domain expertise with many years of IT and servicing experience to deliver high-quality services as a seamless extension of a lender’s business. For instance, our vehicle remarketing services help clients strategically remarket returned and repossessed vehicles by moving inventory quickly; obtaining high returns in short amounts of time; and ensuring on-site representation at the auctions or visibility in numerous Internet selling channels.
In 2012, we’ve broadened our outsourcing offerings with a suite of six services that we call Business Technology Services. It’s especially relevant to lending because regulatory reform, portfolio risk and growing volume in new and used car sales and leases is creating significant challenges and forcing quick operational changes. IT groups within our client base have to manage large amounts of data from multiple sources; ensure privacy and security; monitor compliance; and align staff with workload. Clients are carefully examining critical components that go into successfully supporting their vehicle finance processes, and we believe that those who supplement staff with outsourced resources from Fiserv have a real advantage. That’s especially true because the services – whether it’s systems integration, testing services, or infrastructure management – can be mixed and matched, depending on a client’s objectives.
4. What is your assessment of the automotive market & the industry right now?
The industry is growing again! Almost daily, there are reports about the growth in auto sales. Leasing is rebounding. It’s fun to be in the space again. Even with some nagging challenges, mostly related to uncertain regulations and still shaky consumer confidence, Fiserv is nothing but optimistic.
Captives are recognizing that a difficult time in the financial markets and in automotive funding has also presented a great opportunity to deploy new business models, especially related to credit risk practices. The end goal is to increase volume at the dealership while meeting car buyer expectations for loan products, buyer incentives and credit terms.
More and more initiatives are predicated on finding the best ways to offer flexible options for buyers and using technology to support those efforts. In fact, companies are putting technology in place to capture, manage and provide a better user experience. For instance, companies have selected our Auto LOS v5 solution, in part because they want to take advantage of the credit and funding components that fully automate that process, from capturing credit applications and decisioning credit requests, through booking contracts. Transparent to the buyer sitting in the finance manager’s office are the powerful rules engines that drive the system.
With our portal integrations, some clients are finding that funding decisions are available within seconds, and the dealer can quickly negotiate the specifics of customer credit decisions. That is just one example of how Fiserv supports the auto lending market and is enabling lenders to manage their operation efficiently and cost-effectively. As a result, auto finance companies can do much more than ‘maintain the status quo.’