The auto finance industry is largely booming at present. This rapid growth in earnings from lending and leasing is, of course, desirable and profitable for those involved in the business, but is it also suppressing the industry from utilizing better technology? Many say yes.
New technology is available so why isn’t the auto finance industry taking advantage of it?
With faster, smoother and more secure digital lending channels out there, the auto finance industry has mostly opted not to streamline their businesses and adopt new technology. Moreover, while other industries have begun a new chapter with highly-automated payment processing and business dealings, the auto finance has delayed any changes to their older systems.
Experts believe this is because the auto finance industry is currently not having trouble making a profit. Therefore, they feel no motivation to keep up with trends and updates spreading into a more and more digital world.
If the auto finance industry is choosing to keep things old-fashioned, but if it’s working for them now, why is it a problem? Trouble could reveal itself in a few different ways. The simplest, least serious way is that the company won’t be running as efficiently and as it could be, which in turn could make the company less productive and profitable.
Demand for auto financing has caused regulations to loosen
Another reason why not meeting the changes in technology could be troublesome is the possibility of regulators showing up. The prosperity of the auto finance industry has also brought on weaker standards for lending and leasing. Success in auto finance has made companies over-confident.
They are lending and leasing without requiring the proper credit scores and specifications. This means that eventually, regulators will come to call, and if the company is not running up to par, they will be forced to make some changes whether they like it or not.
Could flimsy standards and a booming industry mean another market collapse?
If the auto finance industry continues to have weaker standards in regards to underwriting and checking credit scores, a major problem such as the bursting housing bubble in the US (the primary cause of the 2007/2009 crisis) could repeat itself. Currently, people can get car loans despite very low credit scores. Companies need to stay on top of stricter regulations while also adopting digital tends that are more secure and modern for their clients.
Where can auto finance industry business find the latest in payment processing?
When companies in the auto finance industry are ready to make the change to a more efficient, streamlined and high volume capacity system they should go to payment processing institutions like Payment Savvy. Keeping up with current trends in business is the prime way to avoid security troubles, keep customers happy and reach the business’ highest potential. Without implementing the newest technology for business in the digital age the auto finance industry could be headed toward a dark place.