FICO recently learned its collection of patents grew by five.
Federal officials recently awarded five new patents to the Silicon Valley analytic software firm related to fraud, artificial intelligence (AI) and advanced analytics. In total, FICO currently holds 192 U.S. and foreign patents, and the company has 93 pending patent applications.
Two of the patents are connected to analytic technology used by the FICO Falcon Platform for fraud management:
• Detection of Compromise of Merchants, ATMS and Networks relates to the generation of compromise profiles for financial accounts based on reported fraud data of a payment account and merchant device. These compromise profiles accelerate detection of fraud.
• Card Fraud Detection Utilizing Real-Time Identification of Merchant Test Sites covers a system and method for detecting when criminals are “testing” compromised cards, by using real-time merchant profiles and specialized scoring models.
FICO inventors also received three patents related to analytics and decision management:
• Efficiently Representing Complex Score Models can transform predictive models into a software program for deployment in a rules engine, helping IT departments solve the problem of operationalizing analytics. This technology is integrated in FICO Blaze Advisor decision rules management system, part of the FICO Decision Management Suite.
• Automatic Modeling Farmer covers an AI system that automatically can develop and evaluate a large number of possible predictive models in order to produce optimal models. This is a streamlined modeling process to enable quick development of large-scale models using Big Data, and is used by FICO data scientists to identify candidate data sources with the most predictive promise.
• Systems and Methods to Improve Decision Management Project Testing is an invention that can visualize the validation status of components of an executable decision management project, which improves project testing. This technology is integrated in FICO Origination Manager.
“This is an exciting time for analytics and decision management, and FICO’s inventions are propelling change in this field,” said Stuart Wells, FICO’s chief product and technology officer. “Our data scientists continue to be at the forefront of the AI revolution and the progress in intelligent decision automation.”
One of the first honorees highlighted among Women in Auto Finance during Used Car Week 2018 — Jennifer Reid of Equifax — delved into an array of topics with Nick, including the subscription model as well as how companies in the auto-finance space are going to handle future technological challenges.
Reid also shared some suggestions on how collaborative efforts could be the pathway for significant fintech advancement this year and beyond.
The podcast discussion can be found below.
Download and subscribe to the Auto Remarketing Podcast on iTunes or on Google Play.
You can also listen to the latest episode in the window below.
Catch the latest episodes on the Auto Remarketing Podcast homepage and on our Soundcloud page.
Please complete our audience survey; we appreciate your feedback.
While facing challenges on multiple fronts, report findings declared that changing customer behaviors and demands should be fueling change in the service and products retail banks are offering. Those assertions arrived as part of an in-depth study released on Wednesday by banking software company Temenos.
The report, written by the Economist Intelligence Unit (EIU) on behalf of Temenos and titled, "Whose customer are you? The reality of digital banking in North America," explored the developing fintech situation for retail banks in North America.
The regional report emphasized the need for North American retail banks to further embrace change by developing their digital marketing and engagement (cited by 53 percent of respondents) and improving product agility (cited by 49 percent).
The report also noted that when it comes to preparing for digital change, American banks, in particular, need to examine the experiences of Europe and Asia-Pacific in creating a one-stop digital journey for their customers. Authors found that those institutions with a global footprint especially can learn from Europe's open banking experience.
Although concerns about regulatory fines and recompense orders are higher in North America (56 percent versus 43 percent globally), the report pointed out there is space for banks to work together to overcome the confusing mesh of federal and state regulations.
The report goes on to note that banks in North America are already beginning to come together to collaborate — a necessary effort in order to build a truly modern banking system that supports innovation.
“North American banks need to be able to respond better to how their customers live now in terms of their digital offerings if they are to remain truly competitive against neo and challenger banks,” said Renee Friedman, editor of the report from the Economist Intelligence Unit.
Other key report highlights included:
—North American bankers see their current business model evolving to develop niche propositions for their clients, more so than their global counterparts do (71 percent versus 61 percent).
—More North American bankers (87 percent) believe that the platformization of banking and other services through a single-entry point will steer the market than their global counterparts (78 percent).
—Retail banks across North America are focusing their digital investment on cyber security (76 percent).
—North American bankers consider conforming to data protection and privacy regulation to be the biggest challenge their company faces concerning data and third-party access (31 percent versus 21 percent globally).
—North American banks’ innovation strategies are focused on investing in fintech start-ups (54 percent).
The Economist Intelligence Unit surveyed 400 global banking executives about the challenges retail banks expect to face between now and 2020, and the strategies they are deploying in response. Orchestrators said 51 percent of respondents were at C-Suite level and 10 percent were board members.
The North America report was based on 100 respondents from North America (the U.S. and Canada) and was supplemented with in-depth interviews with senior executives from leading regional banks.
“Though we have strict regulations in place, nevertheless disruption is happening here in North America. We are seeing exciting developments across the region as the banking industry explores what it means to bank in a digital world,” said Emily Steele, Temenos’ president for North America.
“Incumbent banks are setting up digital banks alongside their own operations, challenger banks are popping up, and now we are starting to see fintechs moving to become banks themselves,” Steele continued.
“Banks are awakening to the need to personalize and contextualize their digital products and services, and offer customers great customer journeys, in order to compete and remain successful,” she went on to say.
The entire report can be downloaded here.
CompliancePoint is looking to find vulnerabilities before data-driven miscreants find a pathway to leverage company information in unsavory ways.
CompliancePoint, a leading provider of information security and risk management services for compliance and data security, recently established a data privacy solutions focus for the automotive industry, with resources to protect manufacturers, auto finance companies, dealers and other users of automotive data.
In 2018, CompliancePoint contends more than 100 automotive manufacturing companies including General Motors, Fiat Chrysler, Tesla, Ford, Toyota and Volkswagen experienced a data breach exposing trade secrets from the OEM.
“Data privacy and trade secrets are crucial components in the automotive industry,” CompliancePoint said. “A data breach can cost millions in monetary value, not including the loss of priceless trade secrets that lead to unfair advantages to competitors when crucial data is compromised.”
According to Forbes, CompliancePoint indicated it can take companies an average of 200 days to identify a data breach, and another 70 days to contain in. CompliancePoint offers cybersecurity assessments to automotive companies, which are designed to prevent potential liabilities and mitigate risk by protecting security framework.
Some key services include mobile and wireless testing, web application testing and data breach attempt response.
“Automotive companies can strengthen their data security, lower operational costs, and simplify their compliance process,” CompliancePoint said.
Vulnerability and penetration testing (PEN Testing) are performed to expose known and unknown weaknesses through experts who attempt to hack the automotive organizations' web systems. PEN tests further identify areas of weakness that put an automotive organization at risk.
CompliancePoint said it can provide a complete cybersecurity solution for automotive organizations through cyber threat assessments and quality results that are crucial to identifying issues that can leave an automaker at risk.
“CompliancePoint further works to resolve found issues, offering a comprehensive yet proactive approach to assessing cyber threats,” the company said. “Risk management provides automotive organizations with monitoring solutions and attentiveness that is needed for real security and peace of mind.”
For more details, go to www.compliancepoint.com.
Joe catches up with NextGear Capital's Randy Dohse at Used Car Week to talk about the B2B applications of fintech in automotive floorplan finance, how macro-economic trends impact the space, opportunities for growth at NextGear and more.
The podcast discussion can be found below.
Download and subscribe to the Auto Remarketing Podcast on iTunes or on Google Play.
You can also listen to the latest episode in the window below.
Catch the latest episodes on the Auto Remarketing Podcast homepage and on our Soundcloud page.
Please complete our audience survey; we appreciate your feedback.
Margin compression is here for the long haul. In 2019 and beyond, dealers will continue to face flattening new-vehicle sales and a growing affordability issue fueled in part by rising interest rates.
What’s more, the Q3 2018 Cox Automotive Dealer Sentiment Index identified credit availability for consumers and competition with other dealers as two of the top four concerns dealers feel are holding back their business. Given today’s tightening landscape, both economically and competitively, dealers are increasingly looking to their lender partners to work with them to do more to optimize processes to increase efficiency, streamline the car-buying experience and ultimately maintain profitability.
The changing needs of the consumer and how they want to buy a car is driving the need for a more seamless experience. Gone are the days where customers are willing to go through a long, drawn-out buying process — consumer satisfaction for how long the process takes at the dealership is now at just 46 percent, according to Cox Automotive’s 2018 Car Buyer Journey Study. Rather, they expect the same easy and technology-enhanced experience they receive across other verticals.
Consumers want to be able to start the shopping and even buying process online and finalize the details in-store. They want to be able to explore finance options, submit credit applications, pencil monthly payments and look into various interest rates online, away from the dealership. However, the ability to fully deliver on these steps for a smoother and faster process is contingent on how lenders integrate with their dealers.
To drive a more streamlined workflow, a starting point begins with lenders partnering with dealers to show up as early as possible in the process when engaging with the customer to help their dealers take advantage of more opportunities from the start. One strategy is for lenders to identify the different ways they are gaining originations and how these are or are not connected. Looking at the organization and makeup of these indirect loan volumes and the technology that supports them is a good place to start. Lenders can then optimize from there.
Furthermore, with the use of efficient tools like payoff quotes connected to title release, dealers can work hand in hand with their lenders to gain titles faster. This helps dealers move inventory quickly while getting accurate information on the title from the lender to ensure vehicle title details are correct. This is critical, as dealers pay an average holding cost of $32 per day, per vehicle that sits idle on their lot. In addition, long-standing proprietary research indicates that vehicles are nearly two times more likely to sell on the first pass through an auction lane when they have titles.
To drive efficiency in the deal completion process, dealers are looking for tools that can support an increasingly digital approach to car-buying, but they need their lender partners to do the same. According to the 2018 Dealertrack Lender Study, 54 percent of franchise dealers are utilizing digital contracting. However, 24 percent of dealers not using digital contracting are waiting for their lenders to offer it. As a result, it’s imperative for lenders to gain an understanding of the value digital contracting can provide to both their organization and their dealer partners. Working with technology providers and their dealers will help deliver the digital experience the customer expects, while also increasing customer satisfaction and dealer loyalty.
Everyone is in it together. By working closely with technology providers, lenders not only will be better equipped to support their dealers, but they’ll also see returns on their end as well.
Everyone wants car volume to continue to stay strong, more used and new originations completed, and customers getting into their preferred vehicles more quickly. These outcomes can be realized with a more digital-forward, streamlined workflow between dealer and lender that is supported by the right technology provider. This approach will ultimately lead to more deals, loyalty and cost savings for all parties involved.
Cheryl Miller is vice president and general manager of Dealertrack’s F&I solutions for both dealers and lenders, as well as the company’s full suite of registration and title solutions.
According to an international IBM study, about three-fifths of auto executives think blockchain will disrupt the car business by 2021, but the findings of the study also show that the industry might not yet be prepared.
Still, next year could show some growth in blockchain usage in the auto industry, a business where “huge potential” exists for this technology.
“We are in the very early stages for blockchain in auto, but there lies huge potential,” said Ben Stanley, who leads automotive research for IBM's Institute of Business Value, in IBM's news release on the study.
“In 2019 we expect to see blockchain start to really take off, particularly with secure data sharing, car and ride share transactions and in-vehicle marketplaces,” he said.
The IBM Institute for Business Value collaborated with Oxford Economics to develop this study, titled “Daring to be first, How auto pioneers are taking the plunge into blockchain.” They surveyed 1,314 auto execs with both OEMs and suppliers throughout 10 business areas and 10 countries.
Despite their finding that 62 percent of these execs think blockchain will have a disruptive impact on auto by 2021, very few of their companies “are ready for blockchain or have a greater perception that blockchain solutions are ready for commercial use,” IBM said in the news release.
Many do appear to see its potential use in auto, though. Over half (55 percent) of OEMs say they think blockchain usage could help clean up information in their business networks, with 47 percent of suppliers saying the same.
And again, there is great potential for this technology in the car business as Stanley noted. Finance, supply and mobility services were identified as top areas for blockchain’s positive impact in auto.
The study also finds that blockchain for secondary market (auto parts) has particularly strong potential in China, Germany and Mexico.
Fleet management could be ripe for blockchain usage: In each country involved with the study, at least half of the OEMs there think this will be an area of “high impact” for blockchain.
Over half (54 percent) of the executives believe new business models could sway how much is invested in blockchain.
'Pioneers' on cutting-edge of blockchain
IBM also touched on what it called “auto pioneers” within the survey group. Representing 15 percent of respondents, these parties are “forging ahead with blockchain,” IBM said, with 54 percent of these pioneers planning on launching commercial blockchain networks at scale within three years.
Meanwhile, just 21 percent of other OEMs (outside of the pioneers) and 4 percent of other suppliers said the same.
Ninety-five percent of auto pioneers intend on making more aggressive blockchain investments in the next three years, IBM said. That compares to 56 percent of other OEMs and 26 percent of other suppliers.
And many of these parties are pointing to new business models having a big influence on blockchain investments: areas like fleet management, mobility-as-a-service, in-vehicle marketplaces, loyalty programs, usage-based models and alternative ownership.
Sixty-eight percent of pioneers believe blockchain investments will be influenced by fleet management; 61 percent by mobility-as-a-service, 58 percent by in-vehicle marketplaces; 57 percent by loyalty programs; 53 percent by usage-based models; and 49 percent by alternative ownership.
Mobility's use of blockchain
Speaking to mobility, in particular, one organization known as the Mobility Open Blockchain Initiative is investing how blockchain could bring stronger safety, affordability and acceptance to mobility.
MOBI touts partners like BMW, Ford, Shift, Faraday Future and General Motors, and sponsors like KAR Auction Services, RouteOne and IBM, according to its website — among many others.
“The auto industry is in a position that it needs to gain efficiencies right now,” MOBI chief executive and founder Chris Ballinger said in the IBM study’s news release.
“With its promise of making mobility safer, greener and more accessible, blockchain has the potential to strengthen trust and collaboration among businesses, consumers and even vehicles,” Ballinger said.
Separate from this study and announcement, a company called Dealer Market Exchange — an enterprise business mobility solutions platform for automotive that is also known as DMX — announced a product Tuesday called VINBlock that involves blockchain.
Described as “blockchain for everyday car business,” VINBlock aims to use vehicle identification numbers to “track the lifetime activity of any vehicle,” the company said.
“Our VINblock permanent, shared ledger, based on Hyperledger Fabric blockchain technology, provides a critical value-add for building a foundation of connected mobility for OEMs, dealers and consumers to conduct business well into the 21st century,” DMX chief executive and co-founder Jason Bennick said in a news release.
“As we innovate next-generation solutions across automotive, we’re striving to create new channels that can operate faster and more efficiently than most everything out there, and in a new, low-cost and fully trusted, secure environment.”
The VINblock permanent shared leger of these numbers is rooted in Hyperledger Fabric permissioned blockchain and related technologies, DMX said. It is designed to keep tabs vehicle identity plus ownership changes and ownership status within the company’s markets.
DMX co-founder and technology head Wes Reid said: “Blockchain is just one of our key technologies along with automation, AI, analytics, IoT and intelligent API’s that we’re integrating in our mobile, cloud platform and solutions that deliver strategic advantages for all our customers.”
BMO Harris Bank announced this week that it is partnering with AutoGravity in an effort to streamline and simplify the vehicle-buying and financing process for consumers nationwide.
AutoGravity can connect potential buyers with finance companies and dealerships to provide consumers with pre-qualified finance offers for their vehicle of choice. Using the AutoGravity app available on iOS, Android and the Web, buyers can choose from new or used vehicles, shop by monthly payment amount, browse local inventory, apply for financing and select a personalized financing offer.
“AutoGravity will enhance the car-finance experience for existing and future customers,” said Craig Harter, head of U.S. indirect auto at BMO Harris Bank. “We are excited to tap into AutoGravity’s growing user base, and look forward to serving the needs of car shoppers.”
AutoGravity has attracted nearly 3 million users who have collectively requested more than $3 billion in vehicle financing. The company insisted consumers are becoming more comfortable securing financing options online, and BMO Harris is well positioned to help digital-savvy car shoppers and dealers save time and money.
“BMO Harris Bank is recognized as one of the top U.S. banks in the automotive finance space, and they have strong relationships with dealers across the country,” said Mark Humphrey, vice president of AutoGravity’s Lender Network. “We are proud to partner with them to provide car buyers greater transparency, control and confidence in the purchase process.”
The list of companies that have joined Mobility Open Blockchain Initiative (MOBI) — a global consortium of industry leading automakers, technology-based startups and other mobility players — grew again on Wednesday.
F&I solutions provider RouteOne is now part of MOBI, adding to the collection that already includes companies such as BMW, Ford, General Motors and KAR Auction Services.
As a member of MOBI, RouteOne highlighted that it will collaborate with industry leaders in pursuit of the creation of a minimum viable ecosystem that aims to standardize blockchain and related technologies to bring transparency and trust to the industry, consumers and communities and reduce frictions and transaction costs in mobility.
RouteOne is looking to enable dealers, OEMs, fintechs and finance sources to respond to continually increasing consumer expectations with highly-configurable mobile tools and services that allow all of these players to create individually-optimized customer experiences; all while helping dealers manage compliance obligations in the F&I office.
“It’s RouteOne’s continued dedication to innovation that is fueling our collaboration with MOBI,” RouteOne chief executive officer Justin Oesterle said. “As a participating member, we are eager to contribute to, and benefit from, MOBI’s innovation process as we actively engage in creating the automotive retailing of the future.
“We believe that MOBI will benefit our owners, our customers, and the industry,” Oesterle continued.
With more than 100 member companies and growing, MOBI is collaborating with a wide variety of players in the mobility and blockchain space.
“We are working with many of the world’s largest automakers and mobility ecosystem players, along with numerous start-ups, nonprofits, governments, transit agencies and technology companies,” MOBI officials said.
“By working together, we can make mobility services more efficient, affordable, greener, safer, and less congested,” they went on to say.
SHIFTMobility is looking to leverage blockchain technology to bring together everything that’s happened to a vehicle into a single solution.
With that goal in mind, the provider of blockchain powered connected shop solutions recently released a tool called Vehicle Passport.
The company explained Vehicle Passport can create a digital identity for any vehicle that can be used to track service history, transactions and real-time events. SHIFTMobility leadership explained vehicle owners need no longer depend on the service histories provided by previous owners or third parties that might be incomplete.
SHIFTMobility said its app can store everything from transactions to sales deed, title, insurance, proof of ownership and receipts, which drivers can make instantly available to dealerships and service centers to ensure they have the products and services when and where they need them.
Consumers can also easily order and pay for replacement parts and services for using SHIFTMobility Auton digital tokens.
The tool’s capability impressed Nidhi Modi, who is managing director of the Modi Group, whose portfolio includes brands such as 7-Eleven.
“As dealership incentive spending hits record levels, optimization has never been more critical. Managing incentive plans is difficult enough with one dealership, so to tackle our multiple stores and over 2 million vehicles, we needed a solution capable of scaling with our growth while simultaneously delivering the insight necessary to seize advantage,” Modi said.
“We look forward to working with SHIFTMobility as we roll out its blockchain-powered Vehicle Passport to all our locations. Not only will the app deliver the corporate intelligence we need, but our customers will benefit from a unique, streamlined experience from vehicle purchase and service to upgrade,” Modi went on to say.
