Open Banking Helps Clear Stipulations and Close More Auto Loans

Not every customer who walks through the door of your dealership on a sunny weekend afternoon can breeze through the auto financing process with no issues. This group could comprise as much as 18% of the borrowers who step into your dealership. In our quickly-evolving economy, many borrowers can have multiple sources of income, thin credit, or a compromised FICO profile. Verifying income with consumer-permissioned data is a digital solution that can help clear stips and smooth out those tricky loan approvals in real-time.

If you have a borrower sitting in your financing department, the team at your dealership has already invested time with them. They’ve shown them several vehicles, developed rapport, and maybe took a test drive. Don’t lose the sale just because the customer isn’t carrying a stack of freshly-printed pay stubs. Using Finicity Lend™’s income verification, the borrower permissions access to the data in their bank account, generating a verification of income (VOI) report. The results that are returned show a high level of accuracy in determining actual income. This low-friction experience cuts down total time spent on each loan application, finishing the verification process in real-time. The borrower doesn’t have to scramble to collect documentation from various sources just so they can leave with the car. 

Extend Credit With Confidence. Get More Approvals.

Tightened auto lending guidelines and a pandemic-influenced drop in consumer demand are causing a slump in subprime originations. When your customer falls in love with a car and is ready to buy, you don’t want limited lending options to cost you the sale. Traditional FICO models are a good start, but when credit scores aren’t enough to get the green light, Finicity Lend augments the credit decisioning with real-time income data that makes the credit decisioning process faster and more efficient for lenders. 

Today’s lending process is in the midst of a vast digital transformation, placing Finicity, a Mastercard company and its open banking technology at the forefront of this data revolution. 62 million Americans have a thin credit file, with only one to four tradelines listed. While they may be more than capable of financing a car, traditional credit scoring models could result in a denial of these applications. With Finicity Lend’s income verification, permissioned data access to their bank accounts gives a more robust picture of their actual financial health. The borrower can be issued a loan that they can be approved for and repay. Finicity’s open banking network covers 95% of direct deposit accounts in the United States, greatly increasing the number of buyers you can assist in buying a car. Accurate income data helps satisfy loan stipulations and lets buyers purchase a vehicle right away. 

Reducing Risk

When a borrower misrepresents their income, it’s nearly always to gain access to more credit than they can handle. 2020 was a record year for fraud in the auto industry, reaching a whopping $7.3 billion in losses. One of the biggest increases came in income and employment misrepresentation. With a 100% year-over-year jump in falsified incomes, one of the most important investments you can make is in prevention. Be sure that you have accurate data with Finicity Lend’s income verification. 

Higher Verification Success Rates Translates to Fewer Lost Sales

With the increased confidence and efficiency that comes with Finicity Lend’s income verification, good sales don’t walk out the door just because there’s not enough paperwork on hand. Verified, real-time data gets the sale closed. Over the course of a fiscal year, lost sales and fraud can cause extensive damage to your bottom line. Finicity income verification is fast and secure. The speed of the process means you can invest time and effort into higher-return work activity. This positive snowball effect can show up in the win column of your balance sheet. 

Our team will be attending the Auto Finance Summit in Las Vegas, October 27-29. To Learn more about Finicity’s income verification for auto, check out our overview or request an auto lending demo.