Technology is driving fundamental changes in the auto finance market, disrupting the supply chain and transforming the ways in which the industry operates, delegates at the annual International Auto Finance Network conference heard on Tuesday.
The event in London attracted a record audience, with hundreds of industry leaders gathering for a packed day of presentations and debates from nearly 40 speakers and panellists.
Keynote speaker Richard Jones, managing director Black Horse Finance, began the day with an overview of future drivers for motor finance, underlining that change is already happening and will continue to disrupt the industry.
Jones highlighted the move to online car research and purchase and the drop in dealer visits, coupled with the rise in car sharing and alternative fuel vehicles.
Regulation and digitisation
The two biggest influencers in what is now an almost £60bn market are increasing regulatory scrutiny, which will require strong compliance processes, and the move to digital, which will improve commercial and customer relationships, according to Jones.
Jones said: “Make no mistake – motor lending is at an all-time high and it is right that the regulators are taking an interest in structural issues within our market.”
He also pointed out that the car buying journey is now almost entirely digital, with technology reducing typical customer “pain points” around gaining information about vehicles and finance, and opening the way for new Amazon-style digital intermediary models which remove the need for a physical retail presence.
However Jones concluded that “the dealer model – done in the right way – will continue to thrive.”
Addressing developments in fleet, Tim Porter, managing director Lex Autolease, said the changing business environment called for a significant shift in the business model and customer proposition.
In a session entitled: ‘Why compete when you don’t have to?’, Porter said the traditional “red ocean” view is that all players should consolidate and compete over the current market.
Instead, he said companies should look to collaborate in new technology partnerships and innovate to create new opportunities in a “blue ocean”, where it was possible to achieve both differentiation and cost reduction.
The conference included breakout sessions looking at issues ranging from the future of the dealership and how technology is transforming the dealership experience, to intelligent mobility and connected cars.
The conference was supported by platinum sponsor White Clarke Group, premium exhibitor Alfa and sponsors Bynx, FICO, Copernicus, Sword Apak, Dealflo, Drive Software Solutions, L&A Consultants, and Netsol.
Edward Peck, co-founder of the IAFN and CEO of Asset Finance International, said: “The record attendance reflects the quality of the speakers throughout the day who provided exceptional levels of insight on the future of the market, with key themes around legislative change, the impact of technology and changing consumer expectations. We will be looking at how some of these key trends are developing at our next conference in November.”
Information about the IAFN conference, including a full speaker list, is available here.
The conference concluded with the presentation of IAFN Awards in 22 categories recognising the range of talent and innovation in the sector.
Videos and reports of all the IAFN sessions will be posted on the Asset Finance International website for free download.
Speakers from previous conferences can be seen here.