By Anat Hoida, Managing Director Focused Industries, EMEA, FICO
describes how Volvo is shaping future driving through its use of cloud-hosted technology
Car dealers and manufacturers want to get more customers through their doors, virtual or physical, and quickly back out again with a set of new keys or a signed contract. Part of the process is setting up the finance — and this is where many lenders sometimes fail. This step needs to be quickly and easily executed.
Meanwhile, the evolution of the digital car buying experience – think Cazoo, Carzam and Cinch – is creating a whole new consumer expectation. In the age of instant, every lane of the motor industry must keep pace. Google searches are completed in seconds, websites load just as fast, and we can message our friends on the other side of the world with the press of a button. We expect quick results. Motor finance companies, wanting to support traditional motor retailers, will need to respond to that challenge, especially when we look into the future of mobility-as-a-service.
One car manufacturer that has taken a big step forward is Volvo. Volvo Cars is making use of the cloud-hosted FICO® Platform to digitize and accelerate the customer onboarding process for its new vehicle subscription service, Care by Volvo. Through this automation, Volvo has cut the time required for credit checks on applicants from three days down to just seconds.
Care by Volvo is a vehicle subscription service (Mobility-as-a-Service) designed to let customers enjoy the benefits of a new Volvo vehicle, without the challenges of owning one. For a fixed monthly fee, Volvo provides subscribers with a brand-new Volvo and covers all regular service, maintenance costs and breakdown cover. The service was introduced to reflect the shift in consumer preference toward subscription or car usage model and away from traditional absolute ownership.
“When we piloted Care by Volvo in Germany, we used manual credit reference checks, but this took too long and wouldn’t scale as we rolled the program out across Europe and North America,” said Fredrik Nero, product owner at Volvo Cars. “We needed to process applications faster, and approve applications in real time, in line with the Care by Volvo digital vision. Moving to FICO and its cloud-hosted digital decisioning solution gave us the speed and consistency we needed to improve the service and roll it out.”
Volvo Cars is shaping the future of driving and making it possible for more people to get behind the wheel of a Volvo.
Harmonization is very difficult as you move to the cloud, and you start to look at the different data streams. Volvo was able to take a manual, fragmented business process, and then centralize it and automate it in real time to make it talk to their backroom applications to make credit decisions.
The FICO® Platform provides the ideal decisioning foundation companies need to successfully achieve digital transformation. It offers unprecedented 360 view and insight into customers’ immediate and future needs by eliminating data silos and enabling interoperability between enterprise applications.
The solution connects to various external data providers, provides a workflow for managing referred decisions and is integrated with the digital sales channel. It is used for both consumer and business subscribers across multiple countries.
Care by Volvo achieved its goal of real-time decisions for more than 80 percent of applications, with straight-through processing. Now, the FICO-powered solution is being extended beyond Care by Volvo to all digital sales and new battery electric vehicles as the Volvo Digital journey progresses.
“We now have a single framework to handle third-party data consistently across countries,” said Nero. “This has allowed us to manage our credit policy with a single underwriting team, and yet allow for local market risk needs.”