How we are using technology to approve more loans faster
Posted on 31 October 2019
Back in 1994 when I financed my first car we didn’t have the modern advancements considered the norm today. I was a little younger and I had been driving various different death traps for far too long. I decided to buy a brand new Citroen AX (I know); we completed an application, faxed it away to some unknown location and two and a half days later a man from the dealership called to say that my application had been approved.
Needless to say that is a thing of the past. Over the last few years CFS Finance has been on an innovation journey partnering with some of the world’s leading technology solution providers to improve our systems and processes. This has changed the face of how a NZ owned niche finance company delivers its unique offering to the New Zealand dealer network.
Today the vast majority of people have internet banking either on their mobile phone, tablet, with access to this information at the push of a button. Here at CFS Finance we have been utilising this accessibility via the data capture portal Credit Sense. This has enabled our customers, dealers and ultimately lenders to speed up the application and decision process. Analysing a bank statement can be complex; Credit Sense has allowed this process to be consistent, accurate and seamless every time. The overriding benefits are a more coherent affordability assessment, giving reliability and eliminating the guess work all in a shorter amount of time.
Another of our recent technology partners is Centrix. Centrix delivers consumer and company credit reports similar to Equifax however with some significant added benefits. Two key benefits that we find essential are Positive Reporting and Smart ID. Whether you are changing your power provider, getting a credit card or buying a home, most of us will apply for credit at one time or another. How you make your payments is now an important factor because recent law changes have allowed this to be measured. The key to Positive Reporting is in the name - if your utility or credit card payments are made on time then this works in your favour. However should they be infrequent, or lack consistency this will be reflected in the report, and probably lead to an unsuccessful application. Since the introduction of the AML Act in 2013 customer verification has become a crucial part of the compliance process. Using Smart ID through Centrix we can now digitally ID applicants allowing us to on-board them easier whilst also fulfilling AML due diligence obligations at the same time.
Once we have joined the dots and put the approval in place we have to bring the customer on-board. Here at CFS Finance we have been using an electronic signing process called E-Doc through Secured Signing for nearly two years. During this time we have seen a substantial improvement in the turnaround time of loan agreement signing, with far greater accuracy in both settlement and compliance. Dealers and customers have the ability to sign legally binding documents anywhere, anytime and on any device. This in its self is a real game changer. We are regularly getting a dealer and two borrowers to sign a loan agreement, in the middle of the day in 3 separate locations. This is why we have now found that 95% of our loan agreements are signed in this way. Secured Signing reduces the need to print high volumes of needless paperwork, saving time, money and also reducing the carbon foot print of any business.
The next stage of CFS Finance’s technological journey is happening right now. We are currently in the process of building a dealer portal and customer interface with the help of Sales Force. Our platform will condense all of our current I.T. tools into one central hub while at the same time connecting everyone involved in the process with the process. Chris Stephenson our Chief Operating Officer says “Most dealer portals are glorified data capture tools or online application forms. CFS Finance’s new portal will be a fully integrated CRM system where we’ll be able to drive sales, increase conversions and minimise the drop off of clients”. For dealers this will mean that we will become your remote Business Manager, the focus here is improved conversion and penetration rates; ultimately helping to sell more cars, finance and insurance. Customers can apply via the web or app, and Dealers directly via the portal. Application status tracking is a key goal, as is continual and transparent communication for all parties. This will be through SMS, email or app status updates.
Typical first tier finance approval times are under an hour, even less if the application has been auto-approved. When the applicant has a “Dented” financial history this can slow things somewhat. Only last week our team assessed, approved and had the customer driving away in under an hour. Once our portal is online this type of situation will be the new standard for a second tier finance provider.