Over a Third of Auto Finance Cases Now Have an Extra Compliance Edge

This is the impressive number published today by technology company Dealflo, who have announced that 35% of all motor finance agreements executed in the UK pass through their platform.

Dealflo’s platform allows motor finance companies to digitise the end-to-end customer agreement process and collects evidence at each stage of the transaction to prove that agreements have been executed to fully compliant standards. This means that over a third of motor agreements executed in the UK now have an extra compliance edge, a positive step for the industry.

Abe Smith
Abe Smith

It is a number that has been bolstered by the news that Santander Consumer has moved to embrace Dealflo’s distinctive approach across their motor finance operations.

The importance of evidencing a compliant financing process has come into sharp focus once again, following the FCA’s March 15thupdate on its ongoing review into the motor finance sector. While reassuring in some areas such as residual values, the FCA review will continue, in its own words to; “work to identify potential areas of consumer harm in the motor finance market.”1

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The need for lenders to provide an evidenced-based compliant customer experience during the financial agreement process to achieve the FCA’s goal of ensuring ‘good customer outcomes’is a strong reason for the business’ sustained growth within the motor finance sector. Abe Smith, CEO & Founder at Dealflo, reflects that:

“FCA scrutiny of motor finance continues to see lenders looking for technology that they can rely upon to demonstrate the highest level of process control.  Our approach embraces all the components necessary to fully automate financial agreements through a single highly-compliant and digital platform. This both improves the experience for the customer and reduces risk for the lender. Increasingly, regulators will be looking to lenders to prove that compliant processes have been followed. It is therefore imperative that lenders collect reliable and quality evidence to prove that compliant processes have been followed, in the event of a challenge.”

The quality of evidence Smith points to could be set to become even more important, as the FCA continues to focus on ‘areas of concern’ identified in the March 15threport. These include: transparency through the financing journey; affordability checking; and commission arrangements. The review will be completed in September 20182.

While for some this may be perceived as a challenge, Smith believes that the trajectory for auto finance in an increasingly regulated environment is positive, concluding:

“I see compliance as a good thing for auto finance, helping to develop and sustain customer confidence in the experience. Into this, technology can play a positive part; reducing risk, enhancing transparency and improving customer engagement.”

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