While they are still trying to understand all of its benefits, auto finance leaders are beginning to incorporate artificial intelligence (AI) into their daily workflow.

Informed.IQ, a developer of AI-based software that verifies, streamlines and optimizes loan processing, recently commissioned an industry-wide survey of auto finance executives to identify the key areas where they are leveraging AI and automation.

Of the more than 2,500 auto finance leaders who answered the online survey during January, 44 percent of respondents said they haven’t incorporated AI into their lending because their C-Suite still hasn’t fully bought into the idea, and another 30 percent said they still aren’t operating in a fully digital environment.

AI Uses

The survey from the San Francisco-based company found 31 percent of respondents want to improve dealer satisfaction as a reason to adopt more automation or AI tools for deal jackets; 26 percent offered they want to compete more aggressively with other lenders.

Justin Wickett, CEO of Informed, said survey results revealed “we’re making progress in the industry, educating lenders on the opportunity and promise of everything AI and automation can do for workflows, deal jacket accuracy and customer improvements.”

The topics most concerning to auto finance leaders were GAP refunds at 25.3 percent and regulatory compliance at 22 percent, with delinquencies and fair lending both at 21 percent.

Key Trends in Automation

According to Informed.IQ officials, lenders understand it is imperative to seek ways to build more efficiencies that streamline the lending processes. Automation is not just a convenience; it’s a strategic imperative in today’s fast-paced environment.

When it comes to automation, the survey found:

• 21 percent of respondents said automation has reduced fraud in their lending process; 19 percent found it increased speed;
• 32 percent noted it improved customer satisfaction, followed by 30 percent saying reduced turnaround time;
• 42 percent plan to upgrade existing automation systems in their future plans and 31 percent saying integrating with other systems; and
• While 41 percent indicated budget concerns, 35 percent expressed reservations about the lack of knowledge or expertise in making additional implementations.

Deeper Dive

By incorporating advanced automation into lending procedures, Informed.IQ officials believe lenders can make more informed and timely decisions and reduce operational costs that will translate into a better experience for customers.

To that end, the poll found that employer mismatch (26.3 percent), income mismatch (24.2 percent), and missing signatures (23.2 percent) represent the biggest current challenges when it comes to documentation defects.

Roughly a quarter of respondents said 30 percent of their deal jackets errors cost them between $1M- $5M in 2023.

Embracing the Future

Additionally, 46 percent of respondents said they are most concerned about increasing the number of staff hours to scrutinize accuracy and/or rectify errors of deal jackets.

“The future of lending is rooted in data, accuracy, and customer satisfaction, and AI and automation are keys to unlocking that future,” said Wickett.

“It’s not just about embracing innovation; it’s about leading the charge toward a more agile and responsive financial ecosystem.”