IBM recently published its annual look at technology trends overthe next five years. Among its predictions were things such assuper human vision via artificial intelligence, body chips thatserve as real-time diagnostics tools, sensors that detectpollution, macroscopes that can combine all of Earth's complex dataand the now-familiar self-driving car.

Get Inside, Take the Ride

Think about it: In five years or less, there is a very goodchance that many of those innovations will impact your banking andlending business, if not your everyday life. The question iswhether you'll get inside and trust the technology. Here's theironic part: If technology can create amazing advances in science,health and safety … why can't it build a better auto financingprocess? It's been more than two decades since the lasttechnology-driven shift in finance and lending behavior andpractices took root, when the internet offered consumers the option(and power) of financing a vehicle online. And while much haschanged since then, recent consumer experience surveys show thatauto lending has for the most part stayed stuck in 2004, walkingthrough sand traps of slow adoption and antiquated systems. Itdoesn't take artificial intelligence to understand that we can dobetter – that we must do better. The key is how technology isapplied to the business model, not how it replaces the businessmodel.

Not so Fast, Internet

Today, we almost take online technology for granted as a part ofa typical auto transaction. It wasn't always that way, of course.There was once (and still may be) an adversarial relationshipbetween automotive retail, finance and technology – a conflict thatgrew to the point where operators adopted low-tech philosophies ofbusiness, delaying the application of efficiency models andfighting against the idea that technology would benefit business –not replace it. Eventually, reality evolved: Businesses began tofocus on serving their digital customers and provide existingcustomers with digital tools that made loan management easier.Today, most apply technology strategically, investing in digitaltools and nurturing the idea that every business has twostorefronts: Physical and digital. Many are progressive in theirapproach to technology and to the changing nature of thebusiness.

Back to the F&I Future

There's just one catch. The process of “F&I” remains atloggerheads with the idea of technology-driven efficiencies andimproved experiences – things consumers are demanding. A recentKelley Blue Book survey shows that of those buyers who went throughan electronic F&I experience, 74% were satisfied with theexperience, compared to the 54% who enjoyed the traditionalexperience. Of those surveyed, 40% said the most frustratingaspects of the car buying process had to do with finance: Fillingout paperwork/contracts (27%) and applying for financing (13%).

As a result, consumers are looking elsewhere for vehicle loans.Dissatisfied with the dealership experience, the emergingpreference is to have financing complete prior to the showroomvisit. Of course, that's not new. In fact, it's a staple of creditunion business. What is new, however, is that consumers want afast, efficient and mobile experience as well as competitive rates.One could, indeed, read that the dissatisfaction with dealershipF&I is indicative of their frustration with traditional bankand credit union processes.

So why – or what – is it about the funding process that painsbuyers so? Ultimately, it's frustration over the amount of timeinvested and where they must spend that time. It's also displeasureover the way the process works. Customers are happy when they showup, yet walk away dissatisfied and angry, especially fromdealerships. There's a better way to provide a mobile experiencethat satisfies consumers and empowers them as well.

Technology at the Right Time and Place

Meeting borrower expectations around customer service is noteasy in this fast-paced, technology-oriented world. It takes theapplication of technology at the right time in a process designedto meet customer expectations of transparency and the immediacy ofinformation. Doing that is tough, and it's certainly no flash inthe pan. It's complicated and intimidating: There are possibly moremoving parts to the process of arranging financing for a car salethan there are in a typical autonomous vehicle. And that's not all.Add to that a fear of change across the staff: Your ace team is inthe day-to-day, and they see changes in process and technology ascareer-enders, not expanders. What many don't see is that changingthe process through the application of technology will help themavoid a career-ending scenario where sales dry up and profitsshrink.

At SpringboardAuto, we believe that effective technologyincludes the development of a right-time, right-place financeprocess that empowers all stakeholders: Customer, dealer andlender. Over the next five years, the question won't so much bewhether or not you're using AI to drive your business, but ifyou've evolved your team and your processes in order to integrateavailable technology, and create a better approach to vehiclefinance. The technology is here. The only question is whether youdecide to get in and take the ride.

Jim Landy is CEO and Founderof SpringboardAuto. He can be contactedat 949-945-4947 or [email protected].