At the height of the pandemic, CarFinance 247 temporarily paused trading as the country was plunged into lockdown and the used car industry came to a halt. For some businesses, this could have been a time of uncertainty. However, our technology team focused on delivering two key platform upgrades during this time.
This paved the way for designing a new digital customer journey and improving the tools used every day by CarFinance 247’s team of account managers. The company’s culture of relentless innovation and strategic adoption of emerging technology meant it was well-placed to capitalise on the surge in demand when the market reopened.
Daniel Graham, CarFinance 247’s Chief Technology Officer, is a true technologist and has worked to transform business approaches to technology adoption across a number of sectors for many years.
What has been the traditional company response to financial technology innovations nationally?
I’d say that, traditionally, larger-scale organisations would adopt an “observe and wait” approach to all technology adoption – leaning on the vendor/procurement cycle and requiring lengthy evaluation periods or careful adoption. Typically, this leads to very slow adoption of a limited set of technology choice from a small subset of vendors. With our own in-house developed platform, this has never been an issue for CarFinance 247.
How has this changed over the past few years?
In recent years, we’ve started to see other firms initially carefully adopt new technologies and vendors and service providers start to offer products and services that enable even the larger organisations to take advantage of modern approaches. For us, we are on the third iteration of most of our data science models and on of our telephony and communications platforms. We are on the cusp of fully digitising the customer experience to enable us to aid even more customers using the channels they prefer. While doing this, we have realised that we can’t build everything ourselves and so have integrated with the best set of customer-focused tools and services to support our ever-growing business.
Is there anything that has created a culture of change inside the company?
Ever since Reg and Louis Rix founded CarFinance 247, they’ve been disruptors in the car finance industry. They have never been afraid to do things differently, move fast and take calculated risks. That example has filtered down to breed a true entrepreneurial spirit throughout the company. It’s allowed them to create an established business with a 500-person team, all without losing that ‘start-up’ mentality.
What fintech ideas have been implemented?
We use several technologies that are popular in fintech. The most obvious ones are our various machine learning models. We use this for obvious things like our risk models, but also in other ways to classify applications, customer intent and vehicle recommendations for new customers. Some of our selected best-in-class technology partners use machine learning in various ways to fine-tune how we respond and proactively contact our customers. CarFinance 247 is really just starting on many of these approaches.
We have long been using Open Banking for various parts of the customer experience and we’re moving heavily into process automation at the back end of our systems – which, for us, is simple – it’s our own internal CRM system so we can hook into and out of with ease. We take the best and integrate with our entire ecosystem.
What benefits have these brought?
Machine learning has brought substantial benefits. With a more accurate way to assess risk, we have been able to facilitate loans to even more consumers who may struggle to secure credit elsewhere. This technology has improved the accuracy of our lending decisions, ensuring we lend responsibly, and consumers receive affordable loans, this will improve as Open Banking adoption increases. CarFinance 247 is already underway with a number of initiatives in the space. We view our entire operating platform as something of an asset – and integrated into our daily lives. For example, we receive alerts when customers request a finance quote appearing directly in Microsoft Teams and Outlook calendar appointments when a customer books an appointment. We build reports in real-time, with dynamically updating data, surfacing directly on our agents’ dashboards – again integrated into our own in-house system.
Do you see any other industry challenges on the horizon?
As the industry implements more automation and the ability to “self-serve,” it is important that responsible lending remains a key consideration. While process automation can take away some of the manual burdens in traditional industries, like Lending. But, we have to be careful that, as an industry, we don’t lose the human element and understand that there are people, like those who are vulnerable, who may be better advised by a human being before making a financial decision.
As banks close many branches, we find people isolated and unable to get the assistance they need. We have also seen in other industries how unconscious bias can creep into machine learning so we have to be vigilant against this. At CarFinance 247, we do believe Open Banking based financial products and data will drive responsible lending and improved automation in the future – but again have to be vigilant to new types of fraud and be careful with the new level of data we can make decisions from. Ultimately, as the whole world becomes digital-first, we’ve got to bring the human element in where it’s needed, rather than eliminate it completely.
Can these challenges be aided by fintech?
In some ways, fintech is both the cause and cure of these challenges. While completely frictionless digital experiences that have people machine-classified and dealt with may appear beneficial, they can also make it too easy to get into ‘unconsidered debt’, or mean it’s hard for customers to understand why they are being treated in a certain manner. Algorithms can be easily optimised in many, for example, over responsibility, for profit or volume over quality. Fintech “tools” need to be used responsibly and appropriately – whether that be for Open Banking, machine learning, digitisation or automation; you cannot throw away years of industry experience in favour of an algorithm, you need to introduce things carefully.
Final thoughts…
Much of “fintech” is really just modern technology applied into a marketplace that previously was quite slow to adapt and consisted of legacy approaches to large scale enterprise technology – procurement-based IT over software development. We saw many years ago how the banking sector moved to an off-shore development model, losing a great amount of technology expertise in the process. You can see this moving back, and embracing the modern approaches as it returns. Much of this is aided by the commercial offerings of the large cloud providers who offer machine learning infrastructure as a service and the pioneers in areas, such as Open Banking.
Manchester has become a massive fintech hub in the UK. It is driving innovation and at CarFinance 247, we are proud to be a part of the community here. For us, technology and innovation is part of our core business. And, while we’ve spawned a whole host of similar business, our scale and passion to innovate is still driving this forward and setting new standards.
