Ronnie Denholm weighs up emerging payment technologies.
How dealers and brokers target and process car purchases is changing rapidly. Firms that can harness emerging technologies to ensure their product and payment processes are convenient to customers will gain the edge.
Consumers are increasingly savvy about finance thanks to comparison websites. With ease they can research rates, terms, and conditions, but an unnecessarily high degree of mistrust of motor finance houses remains, stemming from complex terms, conditions, fee structures and unexpected charges.
Customers accept businesses have to make a profit but transparency is vital to ensure customers do not feel taken advantage of. Using online technologies where people can track their purchase demystifies the process and allows customers to manage their payment.
Technologies such as digital sale transactions are here and, by 2013, will be the only way a car sale takes place, face-to-face or online. Tablets, such as iPads, can complete finance documentation, ensure compliance adherence, or facilitate real-time communication with finance houses. Self-service finance applications online have also grown, benefiting the consumer, motor dealer and finance house. Technology improves consistency, accuracy, speed and flexibility and is a service option todays customers expect to have access to.
Processing payments online will give your customers the flexibility they expect. They can complete any servicing transaction when and how they want whether its checking their balance, making a payment, obtaining a settlement or settling a loan, on their laptop or their mobile.
From banking to bills, online transactions are in our lives and will become mainstream in motor finance. This wealth of electronic data also allows your business to understand your customers history and preferences.
Amazon and Apple have created a new generation of purchasing behaviour, from the weekly groceries to big tickets. Consumers are familiar with receiving relevant product and service recommendations or being prompted to adopt faster ways to pay.
Smart businesses, of any industry, will find how best to deliver this to customers and create a tailored experience using readily available technologies. They will increase pre-approval, re-sell, cross-sell and up-sell opportunities over the next 12-36 months.
Historically, car financing has been a post-sale hurdle for vehicle purchase for dealers and consumers to clear. The industry needs instead to make finance an enabler to car sales.
Emerging technology can make this possible but we need evolution in our processes, business models and mindsets to facilitate this transformation.
Ronnie Denholm is managing director of Barclays Partner Finance, part of Barclaycards Global Business Solutions