Wolters Kluwer Digital Lending Expert Bullish on Next Phase of Automotive Lending Transformation

Rhea-AI Summary

The automotive sector is in a transition phase as digital technologies transform retail transactions. However, considerable challenges remain, particularly with paper-based processes involving dealers and lenders. Jenn Reid from Wolters Kluwer Compliance Solutions emphasizes the risks associated with these outdated practices, such as efficiency losses and potential breaches of Personally Identifiable Information. A shift to digital ecosystems that streamline asset management and enhance security is necessary for improving transaction efficiency and compliance. Companies that embrace this change can expect to see faster processes and reduced operational risks.

Positive

• Transition to digital ecosystems can enhance asset visibility and operational efficiency.
• Reduction of risks associated with paper-based transactions improves compliance and scalability.
• Digitization may free up capital through better management of digital assets.

Negative

• Current reliance on paper-based transactions poses risks and inefficiencies.
• Fragmented systems complicate the transaction process for all parties involved.

But in the near term, auto transactions still largely paper-based, unsecure—and clunky

MINNEAPOLIS--(BUSINESS WIRE)-- While great strides have been made in automotive commerce through the digitization of technology workflows and customer-facing retail transaction elements the past several years, there remains a great deal of work to do on the less glamorous, back-end parts of processes involving dealers, lenders and an increasingly digital-demanding customer population. Even those who employ some digitized processes can suffer from a fragmented system, using disparate technologies and platforms that severely hamper the broader experience for everyone involved. That’s according to Wolters Kluwer Compliance Solutions, sharing its digital lending expertise in a recently published byline.

“As the next phase of automotive transformation happens, what will surface is an awareness of more improvement needed throughout the journey, particularly around paper used in the transaction. In today’s world, the use of paper in the automotive transaction is risky and inefficient,” writes Jenn Reid, Head of Sales, Digital Lending – Motor Vehicle, Wolters Kluwer Compliance Solutions, in a DigitalDealer.com commentary exploring “Digitization in Automotive is Still Far Off for Back-End Processes and Documentation.”

She cites the risks and liability of exposed Personally Identifiable Information that can accompany paper-based transactions, along with major inefficiencies and costs in managing paper, keeping up with revisions and the increased likelihood of using outdated contracts, often leading to lender rejections, and paper returned to the dealer, which further increase one’s exposure risks.

“The next phase of digital transformation will leverage words such as e-contracting, multi-channel origination, digital certainty, auditing, document governance, security, post-transaction asset management and analysis tasks across all parts of the document journey,” Reid notes. “It’s not as flashy as the customer experience rally call of the past several years, but nonetheless critical for the industry to evolve to the next chapter of digitalization.”

Reid believes that successfully overcoming the challenges of paper-based transactions will require lenders, third-party providers and dealers to leverage purpose-built, digital ecosystems that can handle the auto finance industry’s origination channel diversity. Digitization can help simplify the complexities around managing various multi-channel assets post-execution, while drastically reducing operational and time costs.

Beside the benefits of improved visibility of assets, quick expansion of the investor and lender pool, agility, and the ability to scale quickly and dynamically, a digital approach provides assurance of legal and regulatory compliance, enabling lenders to securely manage digital assets throughout their entire post-execution lifecycle.

“This advanced process will offer centralized data management across an entire portfolio, allowing automotive professionals to view metadata across various origination channels and asset classes. What’s more, it will help to control and track access, manage status changes, and transfer control of digital documents while utilizing sophisticated granular controls and permissions to allow for departmental separation and visibility,” says Reid.

“All of this will result in improved speed and process efficiency, and for lenders particularly it will free up capital through syndication, sale, or securitization. It is time for dealers and lenders to lean in and commit to converting from paper to digital throughout the process to improve the experience, but also get ahead of the risks,” she concludes.

Wolters Kluwer Compliance Solutions is a market leader and trusted provider of risk management and regulatory compliance solutions and services to U.S. insurers, banks and credit unions, and securities firms. The business, which sits within Wolters Kluwer’s Governance, Risk & Compliance (GRC) division, helps these financial institutions efficiently manage risk and regulatory compliance obligations, and gain the insights needed to focus on better serving their customers and growing their business.

About Wolters Kluwer Governance, Risk & Compliance

Governance, Risk & Compliance is a division of Wolters Kluwer, which provides legal and banking professionals with solutions to help ensure compliance with ever-changing regulatory and legal obligations, manage risk, increase efficiency, and produce better business outcomes. GRC offers a portfolio of technology-enabled expert services and solutions focused on legal entity compliance, legal operations management, banking product compliance, and banking regulatory compliance.

Wolters Kluwer (WKL) is a global leader in professional information, software solutions, and services for the healthcare; tax and accounting; governance, risk and compliance; and legal and regulatory sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2021 annual revenues of €4.8 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 19,800 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220614005016/en/

Media Contacts for Wolters Kluwer GRC

(Including Wolters Kluwer Compliance Solutions; Wolters Kluwer Finance, Risk & Regulatory Reporting; Wolters Kluwer ELM Solutions, and Wolters Kluwer CT Corporation)

Paul Lyon

Global Corporate Communications Director

Governance, Risk & Compliance Division

Wolters Kluwer

Office +44 20 3197 6586

Paul.Lyon@wolterskluwer.com



David Feider

Corporate Communications Manager, Banking & Regulatory Compliance

Governance, Risk & Compliance Division

Wolters Kluwer

Tel: +1 612-852-7966

David.feider@wolterskluwer.com

Source: Wolters Kluwer

FAQ

What are the main challenges in automotive transactions according to WTKWY?

Automotive transactions face significant challenges due to reliance on paper-based processes, leading to inefficiencies and increased risks.

How can digitization improve automotive transactions for WTKWY?

Digitization can enhance visibility of assets, streamline management, and ensure compliance, ultimately leading to faster and more efficient processes.

Who is Jenn Reid and what is her role in WTKWY?

Jenn Reid is the Head of Sales for Digital Lending at Wolters Kluwer Compliance Solutions, focusing on improving automotive transaction processes.

What benefits does Wolters Kluwer see in transitioning to digital processes for WTKWY?

The transition to digital processes can result in improved speed, efficiency, and regulatory compliance, as well as reduced risks in managing transactions.