Lenders who embrace digital are better positioned for increased loan volumes
MINNEAPOLIS–(BUSINESS WIRE)–
According to Yalich, while lending will always be subject to the vagaries of the financial markets, auto lenders are likely to handle a higher volume of loans this year: “The pent-up demand from consumers waiting to buy a new car will likely release this year, with consumers who bought when rates were higher looking to refinance as rates lower.” He notes that while the traditional practice of refinancing auto loans hasn’t been as popular in recent times, relatively low rates during the early 2020s led many lenders to offer auto loan refinancing.
In any year in which loan volumes are higher, Yalich says it will be imperative for auto lenders to be on the lookout for mistakes and inconsistencies in data. A December 2023 Wolters Kluwer auto lending survey revealed that 77% of auto financiers who still rely on manual or paper processes acknowledge that their documents contain errors in a third or more of deals.
“Auto lenders will start to use artificial intelligence to increase their touchpoints with customers and to detect mistakes and fraud,” said Yalich. “Those who have digitized will find it easier to manage the influx of customers and make sure that they are in contact with customers along their lending journey.”
Respondents in that same Wolters Kluwer survey indicated they were looking to transition to digitized documents in the following areas: for loan processing and funding (31%); credit application and decisioning (28%); and securitization or collateralization (24%).
“The industry has been focused on the consumer experience and making sure that it is digitized to match consumer buying habits,” explains Yalich. “What I believe we will see this year is an emphasis on prioritizing the back end of the lending process. This is a shift in the industry and a new point of focus that will minimize errors, create efficiencies, and keep pace with early adopters who prefer a fully digital lending experience.”
Wolters Kluwer Compliance Solutions is a leading provider of digital technology and expert professional services. Its suite of products and insight resources serve as an industry enabler in the evolution toward digitization for the entire automotive and lending ecosystem. The business, which sits within Wolters Kluwer’s Financial & Corporate Compliance (FCC) division, helps these financial institutions efficiently manage risk and regulatory compliance obligations, and gain the insights needed to focus on better serving their customers and growing their business. Wolters Kluwer FCC is also home to CT Corporation, a leading provider of registered agent services, incorporation services and legal entity compliance, including the new beneficial ownership requirement for small businesses that took effect January 1, 2024.
Reporters wishing to arrange an interview on auto finance trends with Wolters Kluwer experts, such as Yalich, are invited to contact David Feider, Associate Director, External Communications, Wolters Kluwer FCC.
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About Wolters Kluwer
Wolters Kluwer (EURONEXT: WKL) is a global leader in information, software, and services for professionals in healthcare, tax and accounting, financial and corporate compliance, legal and regulatory, and corporate performance and ESG. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services.
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Contacts
David Feider
Associate Director, External Communications
Financial & Corporate Compliance
Wolters Kluwer
Office +1 612-246-9454
david.feider@wolterskluwer.com
