Hyundai Capital and Other Lenders Embrace Automation in Credit Decisions

Hyundai Capital and Other Lenders Embrace Automation in Credit Decisions

Nashville, TN – At the Auto Finance Summit East, leaders from Hyundai Capital America and other auto lenders highlighted significant strides in automating credit decisions, resulting in quicker responses for dealerships and their customers.

Marcelo Brutti, CEO of Hyundai Capital America, reported that the company’s automatic approval/rejection rate for credit applications is in the “low to mid-80s,” with prime-credit borrowers in the “high 80s.” He aims to increase this rate to 90% with the aid of artificial intelligence, though current efforts have plateaued. The focus is on enhancing customer service for consumers, dealerships, automakers, and internal employees.

Hyundai Capital has also automated other aspects of the auto finance process. The percentage of Hyundai deals involving electronic contracts is in the “low 90s,” and the company has begun e-funding, which electronically greenlights deals and transmits funds to dealerships. Currently, about 40% of deals are e-funded, with a target to reach the “mid-50s” soon. Brutti highlighted significant progress in the past year, moving from e-funding rates in the “mid-teens” to current levels.

To achieve this, Hyundai Capital adjusted its software to be less precise on minor paperwork errors and educated dealerships on common issues delaying funding. This dual approach improved efficiency and reduced the need for human intervention, while still providing rapid and accurate processing.

Brutti emphasized the scalability of automation, noting it allows for quick adjustments in staffing levels in response to deal volume fluctuations, without compromising service quality or compliance. He acknowledged, however, that not all transactions could be fully automated due to their complexity.

Other lenders at the summit, such as Arivo Acceptance and Consumer Portfolio Services, also reported high levels of automated decision-making. Arivo CEO Landon Starr mentioned a 70% auto-decisioning rate, while Teri Robinson of Consumer Portfolio Services stated her company auto-decisions “99 percent” of the time. Scot Seagrave of FinBe USA reported similar automation rates, with ambitions to increase further.

Tim Owens of Bank of America highlighted the importance of speed in the auto-lending process, indicating that auto-decisioning, e-contracting, and automatic funding are critical areas of focus for the bank.

These advancements in automation reflect a broader industry trend towards enhancing efficiency, customer service, and scalability in auto lending operations.

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