Wolters Kluwer, a provider of professional information, software solutions and services, released results from an industry survey it commissioned to better understand where automotive, dealer and auto finance professionals are finding operational improvements in adopting digital back-office workflows. The poll also took the pulse on existing barriers in adopting digitized solutions entering the new year.
The online survey was submitted to more than 2,200 automotive dealer, lender and service provider professionals in December. Results showed 22.7% of respondents said they are currently utilizing digital finance solutions. Approximately 21% said they hadn’t yet found the right solution for their needs, and another 19.1% said they hadn’t found the right qualified provider to implement solutions.
Continued Frustrations With Digital
The largest number of respondents (43.6%) said the biggest weakness with their current digital financing tools is that they're too difficult to implement. Thirty-eight percent said they don’t create the efficiencies they need; another 29% said their customers are not yet ready for digital financing; and 27% said they don’t have the full suite of solutions to match their needs.
The majority (nearly half at 43.6%) of respondents said that about a third of their deals contain errors because they still utilize manual or paper processes. Fifteen percent of respondents said their continued use of manual and paper has led to roughly half of their deals containing errors.
Customer Efficiencies Gained
The majority of respondents (62.7%) said it takes customers longer than 30 minutes to complete a sale when they have to sign all documents via traditional paper-based materials. However, 95.5% of respondents using digital said it takes customers less than 30 minutes when signing documentation.
Heading into 2024, 31% of respondents said they want to transition loan processing and funding to digitized documents. Another 28% said they’d like to transition credit applications and decision-making to digitized documents; 23.6% said securitization and collateralization; and 18.2% said title and registration services.
In terms of handling a potential increase in demand for delinquencies, refinances and pent-up sales demand in the next one or two quarters, the largest number of respondents (26.4%) said they would like to adopt more digital to handle the increase. A quarter said they're concerned about the potential uptick and want to digitize sooner than later; and 22.7% said they want to digitize but are unsure how it will help.
More Digitization Needed for Lien/Titling
Regarding titling workflows, 53.6% said they are most concerned with staffing up for additional volume, and 40% said they're concerned about staying in compliance with regulatory changes. Thirty-six percent said they're concerned with handling the growing volume of paperwork. More than a third of respondents (36%) said they're either incapable or unsure about being able to handle an increase in cross-state ownership changes with current title processing.
"These results tell us that as the automotive industry continues to evolve into more of a digital age, it is increasingly important for auto lenders to embrace the transformative power of digitization,” said Tim Yalich, head of motor vehicle strategy for Wolters Kluwer. “In a landscape where speed, efficiency, and seamless customer experiences reign supreme, leveraging cutting-edge technologies isn't just an option; it's a strategic necessity. The future belongs to those professionals who leverage innovation, and in the realm of auto lending, the journey toward success begins with the acceleration of digitization.”
Originally posted on Auto Dealer Today