{"id":45920,"date":"2022-02-08T10:13:13","date_gmt":"2022-02-08T10:13:13","guid":{"rendered":"https:\/\/dev.solifi.com\/blog\/how-not-to-alienate-auto-customers-with-verifications\/"},"modified":"2025-12-10T14:09:23","modified_gmt":"2025-12-10T14:09:23","slug":"how-not-to-alienate-auto-customers-with-verifications","status":"publish","type":"blog","link":"https:\/\/www.solifi.com\/de\/blog\/how-not-to-alienate-auto-customers-with-verifications\/","title":{"rendered":"How not to alienate auto customers with verifications"},"content":{"rendered":"\t\t
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Above and beyond any other process, verifying a borrower\u2019s identity is a universal practice to avoid business risk. Auto lending is no exception \u2013 and it is becoming more and more reliant on fast, easy digital processes to remove barriers to accessing finance.<\/p>\n\n\n\n

What\u2019s driving these changes?<\/h2>\n\n\n\n

When COVID-19 hit and the physical branches of financial institutions closed, customers were forced to go online. Now, according to a 2020 survey of mid-sized financial institutions conducted by Cornerstone Advisors<\/a>, the number of new retail deposit accounts opened in-branch decreased by nearly 60% the same year. And according to Accenture<\/a>, almost 50% of consumers would now prefer to open a new account digitally over face-to-face.<\/p>\n\n\n\n

In the broader market, the boom of branchless neobanks with online verification features is driving the revolution of app-based banking without the need for in-branch or long-winded verification processes \u2013 think the likes of Revolut<\/a>, Volt<\/a>, Monzo<\/a>, Wise<\/a>, and MoneyLion<\/a>. These challenger banks are setting a new precedent for easy onboarding, leveraging the demand accelerated by the pandemic.<\/p>\n\n\n\n

In terms of auto finance, you should be setting similar goals. To make doing business with you faster and easier for customers, there are several verification steps to consider, starting with what information you need and the different ways you can get it.<\/p>\n\n\n\n

1) Who\u2019s the buyer?<\/h2>\n\n\n\n

The fastest way to manage ID verification is digitally. This means minimal effort for the customer and no work burden on the dealer to complete the verification process. An example of this approach would be the borrower simply taking a photo of their ID with a phone and uploading it to the dealer\u2019s system.<\/p>\n\n\n\n

Even so, something to keep in mind is that according to the PIF Fintech and e-money customer onboarding benchmarking report<\/a>, 1 in 4 customers drop out during the FinTech onboarding process. This is despite the fairly widespread use of integrated e-ID document capture. To have better onboarding success and make the best use of integrated e-ID services, you should consider the UX and UI\u00a0aspects of this process, such as making sure you\u2019re taking feedback on each stage of the process to continually optimize the customer experience.<\/p>\n\n\n\n

With the right technology, infrastructure, and analytics for an effective feedback loop, you can expedite the onboarding process and don\u2019t need to worry about building all of the infrastructure yourself.<\/p>\n\n\n\n

2) Where\u2019s the buyer based?<\/h2>\n\n\n\n

Once you\u2019ve verified your borrower\u2019s ID, your risk models may recommend residential address verification as well. Generally speaking, this type of verification is most common for sub-prime and lower credit-quality borrowers.<\/p>\n\n\n\n

For reference, in 2019, 11:FS found that 22% of customers using a digital financial service or app thought that providing this kind of personal information was the most painful part of the experience. And we can\u2019t blame them \u2013 experiencing an address issue can mean they fail the application process automatically, have to resubmit all of their information, and eventually get frustrated and give up. A use case of Prove Pre-fill\u2122<\/a> technology found that the ability to auto-fill identity and address data resulted in a 15% average increase in successful sign-ups and an 80% reduction in keystrokes during the onboarding process.<\/p>\n\n\n\n

As with ID verification, there are third parties that can help with this process and three ways to put this type of verification into operation. This is also the stage where automated form fills can be effective at preventing abandonment.<\/p>\n\n\n\n

Such technologies continue to evolve and can drastically improve the customer experience for necessary (but often time-consuming) verification steps.<\/p>\n\n\n\n

3) What\u2019s the buyer\u2019s income status?<\/h2>\n\n\n\n

Lending to consumer borrowers in the digital age requires objective financial information. Compared to other verification processes, this type of verification holds the highest risk of abandonment, especially if it involves the customer having to dig out various bank statements, payslips, and other financial documents.<\/p>\n\n\n\n

If the customer does resubmit the information after failing verification, there\u2019s still a chance their bank will flag the transaction due. Consumers are often still wary of handing over personal information and social security information, which is another frustration at hand in going through the process all over again.<\/p>\n\n\n\n

To keep lenders happy and avoid borrower frustration, it\u2019s critical to make this process as easy as possible. We recommend three areas of improvement:<\/p>\n\n\n\n