Auto Lenders See Borrowers Less Hung Up About Privacy

LAS VEGAS – Customer privacy concerns aren’t what they once were.

Consumers today are more willing to give companies – including auto lenders and dealers – information about themselves that previously was held close to the chest.

So says Ida McKinley, a senior vice president at GM Financial who has spent 25 years in the finance industry.

“We are going from a day when people said, ‘Oh, I don’t want you to have my data,’ to ‘OK, you can use it if it is to my benefit,’” she says during a panel discussion entitled “Download on Data” at the American Financial Services Assn.’s annual Vehicle Finance Conference held here in conjunction with the National Automobile Dealers Assn. convention.   

Part of the session focused on technology that uses data to help make loan decisions quickly and with greater predictability.

“We are going through an interesting time with technology,” McKinley says. “I haven’t seen so much transformation going on at the same time.

“Captive finance companies (that are units of many automakers) are looking at opportunities to improve customer experiences and use data to the advantage of customers,” she adds.

Part of someone getting an auto loan includes providing personal information including wages and length of employment. But in today’s digital world of Big Data, lenders and other companies already have significant information on consumers’ finances and spending habits.

It’s important to use that information discreetly and properly, says panelist Brian Jelenek, head of data and analytics at lender Chase Auto.

“We do see consumer transactions, deposits and spending,” he says. “That’s fundamentally a good thing. People expect it.”

If, say, a lender’s tracking technology detects an online consumer is car shopping, a digital marketing message to that shopper must strike the right chord.

“You don’t want to say something like, ‘Hey, it looks like you are looking for a car,” Jelenek says, any more than you might tell someone, “It looks like you’ve been to the bar four times in the last six months.”

“We are careful with how (marketing) messages are used,” he says.

McKinley notes General Motors’ OnStar vehicle-connectivity technology is launching an insurance service in which participating customers allow OnStar to use their accrued driving behavior to determine insurance rates.

“It is using that driving data for the benefit of our customers,” she says. “Once it is explained, customers are more onboard with it. That type of data collection can be powerful.”

Auto dealers are finding ways to get their staffs to leverage data technology to do better and faster vehicle transactions, says Justin Oesterle, CEO of RouteOne, a firm with a platform that connects dealers to lenders while assisting in credit applications, compliance and contract management.

Improved efficiency involves “having the right data so you can get the right person in the right vehicle,” he says.

The goal is “to have customers provide the right information to make that possible,” Oesterle adds.    

A right vehicle is one a person can afford and is therefore unlikely to default on the auto loan.

“What we do with customers’ data is important,” Oesterle says.” A discipline needs to be built in all functions.”            

In building new digital tools for the lending industry, it’s vital to establish early communications with tech staffers who do the construction work, says Rush Blevins, chief information officer at Flagship Credit. “Teams want to tell you what they think.”

Heeding their advice can avoid a system “built on a rotten foundation,” he says.

Steve Finlay is a retired Wards senior editor. He can be reached at [email protected].