Rob Severs, Senior VP Product and Insight at the motor retail technology market leader, said that if dealers and other finance introducers were genuinely putting customer needs first, there would be better matching of finance to individuals.
“Like others across the retail motor industry, we’re working through all of the implications of Consumer Duty and it’s becoming clear to us that while this might be a compliance challenge for many dealers and lenders, it is also a genuine opportunity.
“Putting customer needs first places an increased onus on introducers, such as dealers, to ensure that the finance products being recommended to car buyers meet their needs as exactly as possible. To us, that means the ultimate outcome should be fewer finance application fails, which is an obvious positive from a business point of view.
“We believe that the litmus test of whether Consumer Duty is working for consumers will be that finance rejections decrease over time, or at least during the initial months and years following when the regulations take effect.”
Rob said that closer matching of customer and finance should mean that fewer car buyers reach the point where they are making an application likely to be rejected.
“Really, the detailed process of finding out the customer’s needs and working to meet them should mean that by the time they are applying for finance, they should have a high likelihood of acceptance. It’s a strong sign that the process is working.”
iVendi has recently been promoting the importance of management information when it comes to ensuring that Consumer Duty responsibilities are being met, and Rob said that a number of metrics would feed into helping successful applications to increase.
“Distributors will need to monitor conversion rates at each stage of the customer journey, for example, while the success of product suitability questionnaires will need to be scrutinised. For some dealers, this might be quite a lot of work but we see this as a something that can be used to make their businesses more successful.”