In a few special editions of the Auto Remarketing Podcast, we’re sharing some of the panel discussions and keynote presentations from the recent Automotive Intelligence Summit in Raleigh, N.C.
Next up is a pair of presentations from Marguerite Watanabe, president of Connections Insights, who offered an overview of the up and coming players in the auto fintech world followed by a keynote address with Andrew Tai, chief executive officer of MotoInsight, who described how digital automotive retail is changing rapidly.
The full episode 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.
In a few special editions of the show, we’re sharing some of the panel discussions and keynote presentations from the recent Automotive Intelligence Summit in Raleigh, N.C. Next up is a combination featuring a TED-style presentation from Jessie Herdrich from PAR North America about the intricacies of recoveries immediately followed by a fireside chat with AIS chairman Bill Zadeits and Ryan Bachman, who is the senior vice president and chief global security officer at GM Financial.
The full 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.
In a move that the company said will help fintechs, credit unions and banks of all sizes stay ahead of rapidly changing consumer behaviors by leveraging rich data sets and advanced analytics, Experian on Tuesday announced new configurations of its Ascend Analytical Sandbox.
With access to one-stop source for better decisioning, Experian highlighted that users from small- to large-size financial institutions can use the solution for model development, benchmarking, forecasting and more.
“Our innovations like the Ascend Analytical Sandbox and Experian Boost help transform the way businesses operate and consumer’s thrive in today’s society,” said Alex Lintner, group president of Experian Consumer Information Services.
“We understand the unique challenges smaller financial institutions face, including limited data sets, analytics tools and resources,” Linter continued in a news release.
“With the new customizable configurations of our Ascend Analytical Sandbox, financial institutions of all sizes can access world-class advanced analytics, AI and machine-learning tools to make faster, more informed decisions,” Linter went on to say.
Like the name suggests, Experian explained its Ascend Analytical Sandbox contains analytics tools financial institutions might need to gain insight from data including R, Python, H2O, Tableau and SAS, as well as access to SAS Viya via an exclusive agreement with Experian.
Through the platform, data scientists and business intelligence teams can leverage up to 18 years’ worth of depersonalized credit and alternative data and analytics tools to answer questions, such as “what happened,” “why did it happen” and “what should I do next?”
Experian stressed the secure hybrid-cloud environment can allow users to combine their own data sets with Experian’s exclusive data assets, including credit, alternative, commercial, auto and more. From there, users can build and test models across different stages of the lending cycle, including originations, prescreen, account management and collections, and seamlessly put their models into production.
Experian’s Ascend Analytical Sandbox also can allow users to benchmark their portfolios against the industry, identify credit trends and explore new-product opportunities.
All the insights gathered through the Ascend Analytical Sandbox can be viewed and shared through interactive dashboards and customizable reports that can be pulled in near real time.
Additional use cases include:
— Reject inferencing: Refine models, scorecards and strategies by analyzing trades opened by previous applicants who were rejected or approved but did not move forward.
— Prescreen campaigns: Design prescreen campaigns, evaluate results and improve strategies.
— Cross-sell: Identify cross-sell opportunities for existing customers and identify how they may be working with other lenders.
— Collections strategies, stress testing and loss forecasting: Build stronger models to identify customers that have ability and willingness to pay debts, stress test and forecast loss.
— Peer benchmarking and industry trends: Compare current portfolio against peers and the industry.
— Recession planning: Identify areas to adjust your portfolio to prepare for an economic downturn.
“Through our Ascend Analytical Sandbox, we are connecting everything — the data, the technology and the insights to create real business opportunities for our clients,” Lintner said.
Earlier this year, the solution was named best overall analytics platform at the Fintech Breakthrough Awards.
Launched in 2018, the Experian Ascend Technology Platform is recognized as one of the most successful launches in Experian’s history. It’s currently being used by the top financial institutions globally with recent launches in regions including the United Kingdom, South Africa, Brazil and Asia Pacific.
In North America, OneMain Financial turned to Experian to improve its risk modeling and credit portfolio management capabilities with the Ascend Analytical Sandbox. Since using the solution, the company has seen significant improvements in reject inferencing — a process that traditionally can be expensive, manually-intensive and time-consuming.
According to OneMain Financial, the Ascend Analytical Sandbox has shortened the process to less than two weeks from up to 180 days.
“Experian Ascend Technology Platform and Ascend Analytical Sandbox is an industry gamechanger,” OneMain Financial senior managing director and head of model development Michael Kortering said.
“We’re completing analyses that just weren’t possible before and we’re getting decisions to our clients faster, without compromising risk,” Kortering added.
To read the full case study about One Main Financial, go to this website.
For more information about Experian Ascend Technology Platform, Analytical Sandbox PXE, Analytical Sandbox PX or the Analytical Sandbox SX, visit this website.
KPMG discovered overall fintech investment in the U.S. remained strong during the first half of 2019 but dipped a bit following a record year in deal volume and value.
But prospects for a robust second half of the year are good.
According to the firm’s Pulse of Fintech report released on Wednesday, KPMG found investment through the first half of the year reached $18.3 billion across 470 deals, powered in large part by a strong first quarter of 2019.
KPMG noted the $6.9 billion buyout of business analytics firm Dun & Bradstreet by a consortium of investors was the top fintech deal in the U.S. and globally during the first half of the year.
M&A activity was particularly strong in the first half of 2019, accounting for five of the top deals in the U.S. Those developments included:
— Investment Technology Group: $1 billion
— CSI Enterprises: $600 million
— PIEtech: $500 million
— IQMS: $425 million
— Viteos Fund Services: $330 million
“U.S. fintech investment is strong this year, and with several large M&A deals announced, it’s only going to grow,” said Robert Ruark, financial services strategy and fintech leader at KPMG. “The payments space continues to be hot, demonstrating there’s plenty of long-term growth potential in the sector, including verticals like healthcare payments.”
The report mentioned fintech-focused venture capital investment reached a record level in the U.S. during Q2 of last year, bolstered by $300 million funding rounds to Carta and Affirm.
The report also suggested that despite the dip during the first half of this year, fintech investment in the U.S. is poised to see record-breaking highs in the second half of the year. KPMG recapped that three massive M&A deals were announced during the first half of year, including Fiserv’s acquisition of First Data ($22 billion), Fidelity’s acquisition of Worldpay ($43 billion), and the merger of Global Payments with Total System Services ($21.5 billion).
These deals, if they close in during the second half of 2019 as expected, could propel both the U.S. and global fintech investment into new highs, according to KPMG
KPMG pointed out investment in insurtech saw a slowdown during the first half of the year, “which could reflect the increased focus on consolidation in other parts of the insurance industry.”
The report suggested there should be renewed interest in the space once consolidation settles down.
The firm added wealthtech gained traction during the first half of this year as companies worked to develop scale and product diversity.
The report wrapped up by noting the payments space is expected to be a key area of focus for investors, along with business-to-business services.
“Security will also likely be a hot area, and online gaming could also see growth,” KPMG said, adding that its complete report is available here.
Equifax is sharing in hopes of cultivating technological innovation.
The global data, analytics and technology company recently announced a joint collaboration with FinTech Sandbox to help drive global fintech innovation. Equifax highlighted that startups can now leverage various forms of consumer and commercial data from the company in an effort to help these new businesses develop products for the benefit of the industry and consumers.
Nonprofit FinTech Sandbox promotes innovation in the financial sector by making data and infrastructure available to well-qualified fintech startups. In return, Sandbox startups collaborate with current and past residents by sharing learnings and advancements with respect to the fintech ecosystem.
Participating startups pay no fees, and no equity is taken, according to a news release from Equifax.
In addition to data, Equifax said it will give analytical support to the Sandbox by allowing access to its Ignite portfolio of data and advanced analytics solutions. The portfolio can securely and comprehensively support the full analytical lifecycle — from data access and transparency to visualization and deployment — using a single, connected suite of advanced analytics processes, technology and tools.
“The fintech industry is moving fast, and I’m so proud that we have an opportunity to collaborate around our shared mission for advancing the industry. We look forward to helping influence the Sandbox’s next generation of leaders with our data and analytical tools,” said Sharla Godbehere, atlfi and fintech leader at Equifax.
“We’re also offering our expertise in this space,” Godbehere continued. “Being a fintech company, we understand the challenges of bringing all the pieces together to make a product work. This is an exciting opportunity to partner and share our personal insights and experience with these startups.”
Equifax has earned a spot on the IDC FinTech Rankings list consecutively for the past 15 years since it has been produced. It is one of the most comprehensive vendor ranking within the financial services industry.
“At FinTech Sandbox, we have been looking to expand our offerings and support to startups focused on consumer financial wellness,” FinTech Sandbox executive director Jean Donnelly said.
“Equifax, with records for more than 850 million consumers and 92 million businesses worldwide, and advanced analytic solutions, can provide a needed lift for these companies bringing essential solutions to market,” Donnelly went on to say.
As the captive gears up to be a part of next month’s Automotive Intelligence Summit, GM Financial recently expanded its commitment to Spring Labs, the company developing the Spring Protocol, a blockchain-based platform designed to transform how information and data are shared globally.
Spring Labs announced that GM Financial is a part of the company’s efforts to raise $23 million in Series A funding. The round was led by GreatPoint Ventures with significant participation from existing investors, including August Capital, as well as General Motors Ventures, the corporate venture capital arm of General Motors, RRE Ventures, Galaxy Digital, Multicoin Capital, The Pritzker Group and CardWorks.
“We’re pleased to announce our Series A with strong participation from existing and new strategic investors, enabling us to accelerate the development of new products as well as the Spring Protocol itself,” said Adam Jiwan, chief executive officer and co-founder of Spring Labs.
“Additionally, we’re excited to expand our relationship with GM Financial, which has demonstrated its commitment to innovation and collaboration over the past year, playing an active role in the evaluation of products and use cases on the Spring Protocol,” Jiwan continued.
Back in February, GM Financial announced its collaboration with Spring Labs as part of its Spring Founding Industry Partners (SFIP) Program, which is geared to drive improved data management standards to help address critical auto finance industry issues like identity verification and synthetic identity fraud.
Via the GM Ventures investment, GM Financial joins more than 20 other leading financial services institutions in co-developing the first applications to be built on the Spring Protocol — all part of the company’s continued effort to better serve and protect customers and dealers.
As other forms of credit mature and evolve, such as the adoption of chip-enabled credit cards, the companies pointed out that auto financing fraud has become a path of less resistance, having increased by a rate of nearly five times from 2011 to 2018. The companies estimated fraud-related losses in auto financing cost the industry between $4 and $6 billion per year, with a large portion of that fraud resulting from the abundance of synthetic identities, a form of fraud wherein identity thieves establish credit accounts using a mix of genuine and fake customer information, such as a real customer’s name, but a fake address.
As a result, the first products being built on the blockchain-based Spring Protocol are Spring Verify for enhanced identity verification, Spring Defense for fraud monitoring and mitigation, and Spring Protect for loan stacking prevention.
These products are designed to improve customer on-boarding processes by reducing costs while improving data availability, security and granularity. Spring Labs insisted its products will deliver valuable anonymous data to lenders in a variety of verticals, including unsecured consumer lending, small business lending, credit card issuance, secured auto lending and more.
“GM Financial is excited to deepen its relationship with Spring Labs, and we look forward to the launch of the Spring products as we believe they have the potential to better protect our customers from fraudulent activity,” GM Financial chief strategy officer Mike Kanarios said.
GM Financial likely will be discussed this investment and more when the captive appears during the Automotive Intelligence Summit (AIS), which runs from July 23-25 in Raleigh, N.C.
During a fireside chat titled, “Cybersecurity for the Future of Auto,” AIS attendees will discover the answers to the most pressing cybersecurity issues that the auto and auto finance industry are facing along with what cybersecurity technologies are receiving the most investment and why? AIS chair Bill Zadeits and Ryan Bachman, SVP and global chief information security officer at GM Financial, will explore the complexity and importance of the intersection of data privacy and cybersecurity.
More details about the Automotive Intelligence Summit can be found by going to www.autointelsummit.com.
During CU Direct’s Drive 19 Conference last month in Las Vegas, Nick shared a conversation with Credit Union National Association president and chief executive officer Jim Nussle.
The CUNA leader and former member of Congress discussed how credit unions are serving their members and their need for auto financing by leveraging technology and more.
The full episode 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.
Part of the reason Cherokee Media Group launched the Automotive Intelligence Summit: Fintech adoption among consumers has nearly doubled over the past 18 months, according to the latest EY Global FinTech Adoption Index.
EY shared on Monday that the adoption rate is growing faster than anticipated, because 64% of digitally active consumers across 27 markets use fintech, and awareness is even higher globally.
This year, EY added the first-ever Small and Medium-Sized Enterprise (SME) FinTech Adoption Index given fintech’s expansion beyond consumers. EY member firms surveyed more than 1,000 organizations in five countries and found that one-quarter of organizations have used at least one fintech across the following four categories in the past six months: banking and payments, financial management, financing and insurance.
“Fintech organizations are no longer fringe disruptors and have grown into sophisticated competitors,” said Matt Hatch, a partner at Ernst & Young and the EY Americas fintech leader. “Now, financial incumbents are taking note and offering fintech solutions, forming ecosystems that are replacing traditional partnerships.
“We fully expect this trend to accelerate as nonfinancial companies enter the space and leverage technology and innovation to provide frictionless, transparent and highly-personalized services,” Hatch continued.
EY also will have a major presence again this summer during the Automotive Intelligence Summit, which runs July 23-25 in Raleigh, N.C. As the agenda nears completion, a lineup of keynote speakers and panelists have come together that might pique your interest — especially if the following are top of mind for you, your business, or your industry: digital retailing, fintech solutions, cybersecurity, data privacy, customer experience, the future of auto dealerships, Mobility-as-a-Service and more.
Early bird registration is available through June 7 by going to www.autointelsummit.com.
What’s driving fintech adoption?
EY firms interviewed more than 27,000 people to better understand how consumers are interacting with fintech, and the results are promising, according to the firm.
Based on the survey results, money transfer and payments services continue to be the most popular in both awareness and adoption, as only 4% of global consumers are unaware of at least one money transfer and payment fintech service. EY found that adoption rates continue to lag in the U.S., while Europe’s investments in open banking have contributed to higher adoption rates in that region.
Experts also pointed out that SMEs are further behind in their adoption journey compared to consumers. When an SME uses fintech services, EY explained they have essentially selected this company as an approved vendor, so 25% is considered high, and the adoption rate is expected to climb.
Survey findings showed more than one-fifth (22%) of non-adopters already use fintech services in three of the four categories defined in the survey methodology, which means they are on the verge of becoming fintech adopters.
By this measure, EY calculated the global adoption rate could surge from 25% to 64%.
The impact of trust on fintech adoption
The survey indicated that trust plays a large role in fintech adoption, as non-adopters choose to remain with traditional financial services, because they trust them more than fintech challengers.
EY acknowledged that many fintech propositions rely on data sharing, which can present a barrier for adoption. Nearly half (46%) of adopters are comfortable with their primary banking institution sharing their financial data with other organizations if it means better offers on products or services, but less than a quarter (23%) would share data with nonfinancial services companies.
EY suggested this trust gap can create a huge opportunity for financial institutions and fintech challengers as 31% of adopters say they are willing to share data with fintech challengers. Although nonfinancial services companies might lead innovation, EY said they don’t have full confidence when it comes to providing financial services. Still, 68% of surveyed consumers are willing to consider a financial services product offered by a nonfinancial services company.
The SME FinTech Adoption Index found similar trends. SME FinTech adopters are also more open to sharing data with FinTech companies (89%) and other financial services companies (70%) over nonfinancial services companies (63%).
The future landscape
Looking ahead for both consumers and SMEs, EY highlighted newly developed ecosystems will encourage industry convergence as fintech challengers continue to develop and mature, incumbent companies offer new innovative solutions and nonfinancial services companies expand their offerings.
“We’re optimistic about collaboration between FinTech and traditional financial services companies in the future,” Hatch said. “Just under half (47%) of consumers are happy to use financial services from a nonfinancial services company if that company is working in partnership with the traditional financial services company.
Similarly, SMEs are interested in joining fintech ecosystems that integrate different propositions offered by challengers, incumbents and, in some cases, nonfinancial services companies,” he went on to say. “These ecosystems will continue to make financial services accessible for both consumers and businesses while enhancing the overall experience.”
About the research
The EY study is based on more than 27,000 online interviews with digitally active adults between Feb. 4 and March 11 across 27 markets:
— Argentina
— Australia
— Belgium and Luxembourg (treated as one market)
— Brazil
— Canada
— Chile
— China (mainland)
— Colombia
— France
— Germany
— Hong Kong
— India
— Ireland
— Italy
— Japan
— Mexico
— The Netherlands
— Peru
— Russia
— Singapore
— South Africa
— South Korea
— Spain
— Sweden
— Switzerland
— United Kingdom
— United States
EY explained a regular fintech user is defined as an individual who has used two or more fintech services during the past six months.
The 2019 survey placed fintechs into five categories: money transfer and payments, budgeting and financial planning, savings and investments, borrowing and insurance. There are now 19 individual services, but the survey used the same 10 “buckets” as 2017 to enable year-over-year comparison.
The SME survey is based on 1,000 online interviews with senior decision-makers of SME organizations between Jan. 15 and 30. Senior decision-makers were defined as owners, managing directors, CEOs and other C-level executives responsible for business strategy, operations or financial decisions. An SME fintech adopter was determined to have used services provided by a fintech in all four of the following categories in the past six months: banking and payments, financial management, financing and insurance.
Concepts such as artificial intelligence (AI), machine learning, big data and blockchain are bandied about often during conferences, boardroom gatherings and other strategy sessions.
But a research project from AvidXchange showed that business-to-business service providers still are grappling with what exactly these technologies are and how they can be used to improve operations.
The payment automation solutions provider recently released new insights on the future of fintech at REVx, its annual gathering of industry experts, thought leaders and finance professionals. Developed in collaboration with Levvel Research, AvidXchange compiled a white paper. The project revealed that while B2B companies are becoming more knowledgeable about using disruptive technologies to transform financial processes, most are unaware of how innovations like artificial intelligence (AI), machine learning, big data and blockchain are changing the way they work.
Of the fintech trends analyzed, AvidXchange found that AI is the most familiar to users, with 43% aware of its use in fintech applications and 83% citing AI as a strategic priority.
In parallel, AvidXchange discovered 84% of businesses believe AI will give them a competitive advance, and 75% believe it will allow them to expand lines of business by entering new ventures.
In contrast, AvidXchange learned that blockchain was the most alien of the emerging technologies with just over one in four respondents aware of its role in fintech despite increasing momentum behind blockchain applications in the B2B space.
White paper authors went on to note machine learning and big data finished squarely in the middle, with 34 and 33%, respectively, confirming knowledge of daily touchpoints with these technologies.
“B2B fintech has evolved from on-premise accounting systems that help customers manage financial data to dynamic, cloud-based solutions that are impacting almost every area of the business,” AvidXchange chief growth officer Dan Drees said.
“Despite this progress, there are still a significant number of companies who haven’t embraced fintech. Understanding why and helping businesses adopt it will be the primary challenge for the financial services industry as we move forward,” Drees went on to say.
Collectively, AvidXchange explained the lack of familiarity with disruptive technologies indicates a significant area of opportunity for businesses to close this knowledge gap by learning more about fintech innovations and how they will alter the way companies operate in the immediate future.
To read more about how AvidXchange sees emerging technologies impacting the B2B fintech space and being embraced by customers, download the full white paper at this website.
Financial institutions know they need skilled labor as their technological infrastructure changes. Finding those experts has created bottlenecks in the key areas of talent, data and analytics strategy, sometimes blocking progress.
For years, companies have had to draw from a very small pool of analytics talent, made up of a limited supply of analytics professionals and new university graduates. However, new research from Bain & Company finds a workforce on the verge of dramatic change.
To better understand the talent bottleneck and the best way to unleash it, Bain & Company analyzed the global market for analytics talent, both supply and demand, interviewing practitioners and experts, reviewing job boards and professional community listings and studying educational program statistics.
Its findings, captured in a new study titled, Solving the New Equation for Advanced Analytics Talent, estimated that in the next two years the global supply of advanced analytics talent will double from half a million people in 2018 to an estimated 1 million in 2020, brought on by a pivot in traditional and non-traditional education.
“The growth in advanced analytics talent is happening so rapidly it’s hard to find historical precedent,” said Chris Brahm, co-author of the study and a partner with Bain & Company and global leader of the firm’s technology and analytics practice.
“And while the U.S. pool will remain the largest market for analytics talent, other global tech powers are quickly gaining ground,” Brahm continued.
Brahm noted the outlook is especially bright in India where two trends are simultaneously expanding the talent pool: the rapid influx of graduates with advanced degrees in subjects like computer science and data science that are suited to advanced analytics work into the country’s workforce, augmented by India’s deep existing ecosystem in information technology, especially in programming and systems integration.
By the end of 2020, Bain & Company estimated India will have nearly three times as many candidates for advanced analytics work as it did in 2018, an expansion from 65,000 people to more than 200,000 in just two years. Analytics talent supply will climb in China, Western Europe and North America as well, but not quite as quickly.
Brahm emphasized this global growth is good news for any forward-thinking company as innovation in analytics is a priority for almost every organization today and only 30 percent of companies are fully integrated in the space. And yet, according to the report, regional talent bottlenecks will continue to block rapid progress in analytics adoption unless companies implement creative and flexible approaches to global team building.
With companies hiring to create balanced advanced analytics teams, certain skills are in higher demand, according to the report.
For example in the U.S., Bain & Company research points to a shortage of experienced analytics talent, as well as a shortage of available and qualified data engineers and architects and a possible oversupply of junior data scientists. Most available advanced analytics talent has recently graduated, but the report explained how people with greater tenure are needed to lead and manage these teams and are in particularly short supply.
The report mentioned many countries will still have fewer analytics experts than needed.
Additionally, attracting experienced analytic talent away from analytically mature sectors is not likely to be an option for most companies. These early adopters plan to expand their teams fastest, and Bain & Company found that employees are most interested in working for companies with well-established track records in analytics.
Instead, the report suggested that companies can thwart these regional shortages by adopting a multilayered staffing ecosystem approach, including:
—Building centers of excellence for pools of hired analytics experts and providing flexible work options to attract remote talent.
—Retraining capable existing employees and giving them access to automation tools. Most companies have shadow analytics talent today and existing employees already know the company, the industry and how to effectively operate across the organization. Many have the quantitative background to learn analytical skills and nearly 25 percent of respondents to Bain & Company’s survey report that their companies have already implemented advanced analytics training programs.
—Tapping into offshore data hubs, third-party service firms and crowdsourcing for other work. Importantly, rather than trying to do everything in-house, a tiered talent strategy can focus a core, in-house analytics team on strategic tasks, while recognizing what work can be outsourced.
Brahm pointed out this ecosystem approach will make more sense than full vertical integration for many companies given the breadth of advanced analytics expertise likely to be needed in the future.
“Embracing a tiered talent ecosystem will allow companies to tap into the rapidly growing global talent supply, create a more flexible and elastic model, all while leaving room to redeploy existing talent in new and creative ways. Companies cannot afford to let a bottleneck in analytics talent slow them down, and thankfully they won’t have to,” Brahm said.
The complete report can be downloaded here.
