"Disruptive but Necessary" the Focus of Auto Finance Innovation Conference March 08, 2018 Auto Finance professionals from the United States, Canada and Australia are attending the third annual Auto Finance Innovation Conference this week featuring presentations and panel discussions focusing on the disruptive, but necessary, influence technology is having on the industry. Andy Clements, Senior Vice President of Information Technology at Global Lending Services, presented 10 Innovation Ideas for 2019. Some ideas already exist in the auto finance space, while others are just getting started or haven’t yet appeared. Alternative Payment Channels make it easier for customers to understand and pay bills. He cited online, mobile, E-Bill, Mobile Wallet and In-Lane as examples of alternative payment channels. The challenge for auto finance companies is to integrate these channels with servicing and accounting functions. Autonomous Vehicles would help reduce 1.2 million traffic fatalities per year world-wide, 90% of which are caused by human error. In the United States alone, there were 35,092 traffic deaths. He said the cost in the United States is reaching $230 billion a year. Blockchain functions as a distributed ledger that removes the clearing house in the middle of transactions, making them faster and more efficient. Blockchain, he said would streamline functions for auto finance companies like title processing, payment processing and securitization. Machine Learning and AI could help with payment processing identifying tasks like checking for signed contracts, names that match and identity documents. Some of the challenges would be the quality and completeness of the data. Implementing Machine Learning would require a steep learning curve, resource availability and the expertise of a data scientist to work with the company’s tech team. Alternative Data he defined as anything other than traditional credit bureaus. For example, utility bills, cell phone bills and utilization, location data and social media. He said alternative data is a good way for companies to supplement traditional credit data. Location Services, he cautioned, is something with which the auto lending industry needs to be careful. “Customers may ask why the auto finance company needs to know where they are and become offended,” Clements said. Big Data is the ability to store and process large amounts of data using parallel processing techniques. Infrastructure as a Service (IaaS) is the ability to build and manage “behind the scenes” systems so the auto finance company does not have to do it in order to use resources more efficiently. Software as a Service (SaaS) puts lenders in the position of “Buy or Build.” There are cloud-based applications that deliver functionality, usually on a subscription basis. Integration: Clements used the example of Echo Dot and Amazon as the example of the power of a small device is its ability to integrate with other software systems. “In lending, you want to be able to tie into what’s built in order to share knowledge,” he said. AFSA staff is attending the conference and will continue to report on the presentations and panels on AFSA's Blog.