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Cybersecurity graphicDigital Revolution in Indirect Lending

By Kurt Howard, Executive Vice President – CUAC

For my colleagues who have worked in the indirect lending space for any length of time, who can remember ALL the way back to 2000? It seems like yesterday that we were hunkered down in our basements with our MREs waiting for the inevitable doomsday events of Y2K that never quite happened. It seems like yesterday but almost 2 full decades ago were the days of receiving credit applications across the fax machine from our dealer partners. From there, it was a frenzied attempt for the data entry to be completed so that credit was pulled and we could attempt to get a call‐back to our dealers within 15 – 20 minutes. What happened a few years later? DealerTrack® and RouteOne® came on to the scene and revolutionized the way that credit applications were submitted and decisioned.

This was the last seismic event that took place in the indirect lending space that required lenders to modify the way they were doing business or risk being left behind. Although eContracting has been around for many years, the digital contracting revolution in indirect lending is approaching quickly. What does this mean? This means that consumers closing their financing transactions at the dealership now have the ability to navigate all aspects of their car shopping experience in a digital environment. This includes the initial online car shopping experience through the dealer site or supporting portals, submission of credit application in some cases, and finally the execution of all documents captured digitally through a device such as DocuPad® or an iPad®. As more and more technology from RouteOne and DealerTrack® is embedded into the dealer management systems, the days of a dealer using 3RD party solutions to generate credit applications are numbered. With the DMS solution, inventory control, marketing features along with sales and F&I functions all being streamlined into a seamless solution, dealers will begin to recognize huge cost savings and efficiency throughout the entire car sale lifecycle.

eContracting is an essential component to fulfill the demands of today’s digital consumer,” said Jeff Belanger, Senior Vice President of Business Development, RouteOne. “It provides an optimal consumer and dealer experience along with robust process flexibility with its remote capabilities. Cost savings, convenience, and efficiency are just a few reasons among many that this functionality has become mainstream. eContracting volume doubled every year, for its first 5 years, as dealers rapidly adopted this new technology. We continue to see steady positive growth in volume, with over 11 million booked contracts. One of the requests we often hear from dealers is for the availability of more finance sources with whom they can eContract. Last year, we experienced a 40% increase in the number of supportive finance sources. We suspect that their availability will even further expand adoption and usage.”

What does this mean for your credit union? For your credit union to stay competitive in this next significant shift in the indirect landscape, you must partner with a company that provides you access to industry leading technology. This includes connectivity to RouteOne and DealerTrack®, the availability for your members to utilize eContracting and Digital Contracting through these providers and access to digital contract delivery methods resulting from dealers utilizing this technology. As the nation’s leading provider of these indirect lending solutions to credit unions, CUAC is well positioned to ensure that your credit union is at the forefront of the technology for the next 20 years.

Interested parties should reach out at khoward@cuac.com or online at www.cuac.com/contact.