Over the past few months, dealers and lenders have been focused on ensuring that their operations are running efficiently and with as little disruption as possible. This has lit a fire under the entire auto retail industry to go digital and go digital now.

But it isn’t as easy as saying, "One, two, three," when it comes to the heavily regulated auto-financing space where lenders must carefully balance consumer needs and expectations with federal and state rules and restrictions.

Dealers and consumers are moving to digital retailing at a never-before-seen pace. In fact, per a recent Cox Automotive study, two out of three shoppers are now more likely to buy their next vehicle 100% online. Likewise, according to Dealertrack sales and transaction data, between mid-April and mid-July 2020, dealer interest in eContracting grew 94% while the number of contracts signed remotely rose by 97%.

So, what exactly is the role that lenders play in this shift online and how can they maintain compliance at the same time? Verifying identities, protecting data and reinforcing best practices for electronic signing ceremonies and remote delivery are just a few of the many considerations. With the right digital retailing solutions and safeguards in place, lenders can enable a digital browsing experience that can turn a car shopper into a pre-approved, contract-ready buyer for their dealer partners. By embracing this digital workflow, lenders can ultimately create an expedited signing, submission, review and funding process that drives efficiency and value for all parties involved.

There has never been a more important time for lenders to position themselves as strong service partners to dealers. Here are some tips to help lenders find a successful path to going digital without compromising compliance.

One size does not fit all

Between their unique financing models and distinct business goals, a one-size-fits-all solution just isn’t going to cut it for lenders – today or in the future. Fortunately, the right technology partner will help lenders ensure their digital strategies never stray from their business goals and always align with their available resources, as well as an ever-evolving F&I compliance landscape. By developing an optimized digital strategy that supports solutions, lenders can remove friction and improve the car buyer’s experience in several ways, including enabling real-time decision capabilities, providing alternative deal structures that allow customers to shop multiple vehicles and communicating all the documents needed for closing by sending structured stipulations.

A digital workflow is good for everyone

Regardless of where you land in the car-buying ecosystem — dealer, lender or consumer — a digital workflow with the ability to have a customer truly buy a car online is a game changer for everyone. With built-in tools that have been fine-tuned to ensure no signature is skipped, calculation error made or required document missed, eContracting allows for faster funding, less back-and-forth, greater accuracy and reduced re-contracting. This streamlined workflow is also further bolstered by a growing use of remote signing. As permitted by state, lender and provider, remote signing offers customers an easy and seamless way to eSign all deal documents from anywhere.

In a climate that is changing what feels like daily, finding new ways to reach consumers and help free up dealers’ cashflow will be crucial to strengthening partnerships and moving forward on the path to going all in on digital. This path, however, isn’t always going to be a straight line for lenders. But, with the right strategy and procedures in hand to ensure IDs are verified, data is protected and signing ceremonies result in securitized contracts, lenders can partner with dealers to go digital, smartly.

Andy Mayers is a lender solutions strategist at Dealertrack.