Craig Schleicher of PwC sees robotic features having a much greater presence in auto finance in the not-so-distant future. No, C-3PO and R2-D2 from Star Wars likely aren’t taking over underwriting and servicing vehicle installment contracts, but the manager of consumer finance at PwC described how robotic process automation (RPA) can be a good thing.
Schleicher is set to discuss RPA and other cutting-edge developments during his Used Car Week general session on Nov. 14 as the industry gathers in Palm Springs, Calif., for the annual gathering of thought leaders, operators and executives that touch all segments of the used-vehicle space.
During a phone conversation with SubPrime Auto Finance News earlier this week, Schleicher noted that two technology developments are percolating in auto finance; one within the customer-facing business segment and those connected to finance companies’ internal workings.
“On the customer side, the quality of inventory data and VIN level information has really changed the interaction model for a lot of lenders and allowed for direct to indirect conversion where lenders are presenting vehicle options and financing options on their website and becoming a lead referral source for their dealer partners, which really changes the dynamics of indirect lending,” Schleicher said.
“On the internal side, I see robotic process automation as something that has been adopted significantly in a number of other industries that auto finance is just starting to dip its toes into. To me, it has really significant potential to increase the efficiency of the back-office operations across the entire loan lifecycle,” he continued.
Before you open an online search engine to learn about RPA, check out how Schleicher succinctly explained the technology in two sentences.
“RPA you can think of as software overlay that works a lot like an Excel macro that also works across multiple different programs,” he said. “It combines an easy user interface to design programming with technology like optical character recognition to make it easy to automate repetitive tasks that are highly manual without having to go through a full system integration.”
Schleicher explained that one example where RPA could be impactful in auto financing is how the technology could produce review capabilities of contract documents against what is contained in the loan origination system. And not just a sample, but 100 percent of a portfolio.
PwC delved into the connection of RPA and auto financing through a project that’s available here. Schleicher will be elaborating on the topic more during his session at Used Car Week, and will also cover specific processes where RPA could enhance how finance companies operate.
“I’m really excited for the presentation because I think we’re going to take a strategic lens on some of the elements of auto finance that don’t get the publicity that they deserve,” Schleicher said. “We’re going to take a look at how lenders can start to think strategically about opportunities for innovation across the loan life cycle to improve their performance in the servicing and collections function specifically.
“One of the areas I’m most excited to talk about is I think there is a real opportunity for lenders to change how they think about the collections function from being just a loss-prevention tool to something that’s part of their bigger strategy and supports their overall goals of customer retention, loyalty and satisfaction,” he continued.
When finance company executives have down time, perhaps they can delve into the Star Wars series of motion pictures; maybe robots can make their institutions more compliant or profitable.
“I also think there is a big opportunity and the need for continued evolution in the technology to improve the customer experience,” Schleicher said. “I expect that the pace of change in auto finance will be much greater over the coming years than it has been.”