Finance Monthly - Deal Maker Awards 2023

53 first perfect the experience of applying for loans, and ultimately credit cards. What makes for a great experience? First and foremost, it’s one that is 100% digital from start to finish. If Honda Financial needs to see my tax return or pay stub, fine, but allow me to take a photo with my phone and send it that way. Next, adopt the Quicken Loans approach, where first I secure the financing and then I go shopping for a vehicle. Once I decide which car I want, the check is cut and sent to the appropriate dealer. This is far more relevant to the consumer than many in the industry may realise. Or, even better, integrate the financing into the checkout process. Manufacturers can follow established processes in retail, including an option to open an account in order to apply for quick financing using a Buy Now Pay Later (BNPL) model. Consumers can choose their car, hold it with their down payment (or an acceptable portion of it), and then start applying for financing. I see opportunities here for targeting in-house financing to consumers or partnering with traditional financing institutions to give consumers a menu of finance sources, all integrated into the single checkout process. Who Will Own Finance Experience? Auto brands are the natural owners of the finance experience, especially as they can tie in so tightly with the purchase process. However, banks are part of the new experience as well, particularly for those auto brands that either have established partnerships or plan to engage new partners to bring in necessary scale, buyers, or offerings. Going further, the combination of auto brand plus internal financing or partnering is what can ultimately activate the “Honda” card, points, or rewards, leading to payments loyalty. To lead the market, however, auto brands need more than finance innovation. Experience is equally important, meaning it will be the combination of finance and experience that differentiates the brand and cements customer loyalty. The services and app-based models are still in their infancy, which means there’s still time for auto manufacturers to lead the innovation (and benefit from the opportunity to cement long-term relationships with consumers). In a few years’ time, I’ll be ready to purchase a new car. Whether the check for it comes from the lending arm of a manufacturer, or a FinTech company that moves into the space, will depend on the lender’s appetite for innovation. Eddie Chin brings his 15 years of financial services consulting experience to the intersection of experience design, solution development, and financial services. In his role at Rightpoint, he helps his clients use experience and design to innovate and solve strategic and technology challenges. Eddie joined Rightpoint as part of its acquisition of TandemSeven, where. He led engagements with clients in consumer banking, commercial banking, wealth management, and corporate banking. Finance Monthly. Financial Innovation & FinTech

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