The auto finance industry is ‘ripe for disruption’
The auto finance industry is “ripe for disruption” as customers demand more pay-as-you-go ownership models.
That’s the conclusion of a white paper, co-authored by Capita and Finativ, which said financial firms urgently need to wake up to a model of private car ownership that encompasses vehicle, insurance and fuel.
“Banks already have the technology in place to enable rapid customer verification, authentication and credit approval processes – all of which are essential for the industry to move towards a ‘pay-per-reader’ model.
“Yet many financial institutions have been slow to apply this to automotive financing and leasing for fear of alienating traditional dealership and franchise relationships,” he said:
“Even for a sector facing considerable challenges, the opportunities are ripe for a financing provider to become the customer’s reference for all aspects of car ownership: the vehicle, financing adapted to the mobility needs on measurement and technology to support car sharing and easy mobile payments,” he added.
The publication of the report aligns with the appointment of Harish Naidu to the new role of Associate Client Partner for Automotive Finance at Capita Experience, part of Capita plc.
Aparajita Ajit, Managing Director of Capita’s Financial Services Business, said: “The current model of private car ownership – paying separately for vehicle, insurance and electricity/fuel – may soon take over. on smoky diesel engines. We book all-inclusive vacations, so why shouldn’t the car ownership package include all aspects of ownership?
“Winners of the hearts and wallets of tomorrow’s car shoppers will serve the needs of a generation more accustomed to Apple Pay and the Spotify subscription model than more traditional payment methods. The message to today’s auto finance players is clear: don’t risk getting caught sleeping behind the wheel.