Industry Voices | Best Practices to Ensure Digital Deal Jacket SecurityIndustry Voices | Best Practices to Ensure Digital Deal Jacket Security

In today’s digital age, the automotive industry has embraced many technological advancements to streamline operations and enhance customer experiences. Among these is the digitalization of deal jackets – the comprehensive records that encapsulate every aspect of a vehicle sale, including compliance functions, financing, warranties and customer information.

However, with this shift comes an urgent need to secure these digital deal jackets from individuals with malicious intent. Keeping the digital deal jacket secure not only protects sensitive customer information but also safeguards the reputation and operational integrity of auto retailers and their partners. However, recent industry analysis shows that many dealers are still not protecting digital deal jackets.

The Importance of Securing Deal Jackets

One of the primary reasons auto dealerships must secure digital deal jackets is to protect sensitive customer information. Deal jackets contain a wealth of personal data, including names, addresses, Social Security numbers, financial details and even copies of drivers’ licenses. If this information falls into the wrong hands, it can lead to identity theft, financial fraud and other malicious activities.

Gaps still largely exist in ensuring a secure digital transfer of customer information. A recent industry survey illustrates that roughly 20% of dealership employees say they don’t know what process they have in place for identity verification and that drivers’ licenses are usually processed in the finance office, or that they do not know of a process in place at the dealership. Another 14% of dealer respondents said they do not have a process in place for drivers’ licenses because they have always used the same format but couldn’t cite any specifics of the process.

More alarming is the fact that 42% of dealers using digital deal jackets admitted that they either never include a digital copy of the customer’s driver’s license in the deal jacket, or only very few times, or only some of the time.

Only 6.5% of dealers said they have automated the process of digitally scanning a customer’s driver’s license and then having it automatically placed in the digital deal jacket. Furthermore, scanning of the driver’s license is important, but dealers must also utilize verification technology to validate the driver’s license and the person’s true identity. This additional step helps to validate and verify the individual via address verification, red flag, OFAC, DMV lists and synthetic fraud checks.

Compliance With Legal and Regulatory Requirements

Auto dealerships are subject to various legal and regulatory requirements concerning data protection. For instance, the Gramm-Leach-Bliley Act (GLBA) and the Safeguards Law mandate that financial institutions, including auto dealerships, protect the confidentiality and security of customers’ nonpublic personal information. Non-compliance can result in hefty fines and legal repercussions.

Use of Driver’s License Images for Deal Jackets

The need to digitize deal jackets raises another challenge for many dealers today, who must modernize the way they  capture and insert driver’s license images into their deal jackets. Only 19% of dealers said they collect a digital copy of the license. What is troublesome is that of those, 19% of dealerships have sales reps asking consumers to TEXT them copies of the licenses.  Only 8.6% said they collect a digital copy and also validate the license. Most alarmingly, less than 1% of dealers said they collect a digital copy, validate the license and then compare it against DMV records to truly verify the license belongs to an individual; also, 52% of dealerships are still making photocopies of drivers’ licenses.

Modern Solutions for Securing Deal Jackets

Integrating new cybersecurity solutions with older systems can be challenging, as legacy systems may not be compatible with modern security protocols. Encryption is a fundamental component of securing digital deal jackets today. By converting sensitive information into unreadable code, encryption ensures that even if data is intercepted, it cannot be accessed without the correct decryption key.

Multi-Factor Authentication

Multi-factor authentication adds an extra layer of security by requiring users to provide two or more forms of identification before accessing sensitive data. This could include something they know (a password), something they have (a smartphone), and something they are (a fingerprint).

With all of this being top-of-mind for dealers, the industry still needs a lot of education. Securing digital deal jackets is vital for auto retailers, ensuring customer data protection, trust and legal compliance. Modern tools like encryption, multi-factor authentication and regular audits help dealerships safeguard data and thrive in the digital age. Leading retailers understand the need to leverage advanced tools to secure deal jackets to protect the privacy of their customers.