You have all heard the saying, “What happens in Vegas stays in Vegas.” I am all for that, however, I think I have to make an exception this time. Nothing could prepare me for what I experienced a few weeks ago. As someone that has professionally been in or around the auto finance industry since 1997, I was impressed to hear that this event has been around equally as long.
The American Financial Services Association (AFSA) held its 22nd annual Vehicle Finance Conference & Expo at the Bellagio in Las Vegas, March 20-22.
Traditionally one of the first events of the year for the auto finance industry, this conference has become the magnet event for industry executives, thought-leaders and innovators in the auto finance industry. Nearly every captive auto finance company in the United States, as well as the auto finance divisions of major banks, and a large portion of the independent vehicle finance sources, are members of AFSA. Over the course of the conference, I was able to reconnect with old colleagues, see acquaintances that work with other vendors, meet with current customers as well as future prospects. . I felt like I was home, but now I was speaking about what made me want to work for LexisNexis Risk Solutions in the first place: how our solutions can help our customers and open up more opportunities for consumers throughout the U.S. As an exhibiting company, the event offered us the opportunity to connect with more than 600 auto lenders and executives involved in all aspects of vehicle finance.
Alternative data is becoming more and more mainstream. In a straw poll of lenders announced at the AFSA conference, 50 percent said they already use alternative data; 18 percent said they are currently implementing or testing it; 18 percent said they are considering using it in 2018; and 9 percent said they are considering using it in 2019 or beyond. Only 5 percent said they were not considering using alternative data at all. This survey was presented during a session that had representatives from three different types of lenders-Captives (GMF), Indirect (CPS), and Bank (TD). The consensus was that alternative data is complementary to bureau data. The survey actually dove further into this by showing that 73% of respondents that utilize alternative data overlay it with an existing credit score. A big benefit is the reduction of manual underwriting and improved performance. You can learn more about blending these two data sets together through our Modeling Blended Alternative & Traditional Data Whitepaper.
When Richard Cordray was still the director of the CFPB he talked very positively about alternative data and how at the time several lenders were looking at its use cases. This session and other conversations throughout the conference further confirm that this is the direction the industry is heading.
The House Doesn’t Always Win
If this an event you are thinking about attending next year, here are some words of advice: Stock up on your business cards and be ready to talk. As an exhibitor, I was fortunate enough to have a booth. Armed with LN swag, business cards and my smile, I was ready to rock! I got to meet quite a few interesting individuals (I hope they would say the same about me). They ranged from C-Level to SVP of Consumer Lending, National Account Executives to Director of Sales, Technical Product Owners to VP of Credit and Lender Relations. It was great to speak to people from so many different areas in the industry and to hear their perspectives. Lenders (specifically ones in the indirect space) need to do a balancing act between performing due diligence and accessing credit risk while maintaining acceptable levels of response times back to the dealerships that are submitting credit applications. Competition is stiff out there, as dealerships are sending those same applications to a handful of lenders at the same time. As it was in the Wild West, so it can be when it comes to indirect lending. The quickest to draw is usually going to win. It was refreshing to be able to let many of these folks know that LexisNexis Risk Solutions is able to assist with these and other issues across their workflow. I should know, I was an end user of our products for over 15 years.
Even though I did not leave Vegas with a stack of 100’s in my suitcase, I did leave with the knowledge that the auto finance industry is alive and well.
If you attended this event please post a comment and let me know your thoughts. If you are looking for more information about credit risk decisioning or marketing check out our Credit Risk Insights page for industry related blogs and resources.