Customer verification
With the developing market, and particularly the increase of Personal Contract Purchases, motor finance providers need to deliver smart solutions for customers to maintain their competitive edge. They have to be fast and flexible. This is made more challenging in the context of rapidly rising financial crime, where criminals exploit the easier access to both financial products and personal data which market trends have demanded and created.
There is a need for a solution which enables the salesperson to validate the customer’s identity and financial status in real-time, to ensure that they are who they say they are, that they are telling the truth about their circumstances, and that they are not a risk to the business.
"New business volumes in the point of sale (POS) consumer new car finance market grew by 9% in August, compared with the same month in 2017, while the value of new business was up by 14% over the same period."
£36.772 million (gross) lent in the twelve months to August 2018
Finance and Leasing Association (FLA) press release, 5th October 2018
Regulation and compliance
Easiness of obtaining credit is a major area of concern for the Government and the Financial Conduct Authority, too. They have responded to the changing financial and consumer landscape within the motor finance sector by conducting in-depth research to help them shape their regulatory response.
“We wanted to understand the use of motor finance products, and assess the sales processes employed by firms and whether the products could cause consumer harm.”
Financial Conduct Authority (FCA) Our Work on Motor Finance, March 2018.
One of the key questions the FCA are asking is: “Are firms taking the right steps to make sure that they lend responsibly, in particular by appropriately assessing whether customers can afford the product in question?”
In other words, are customers and their circumstances being sufficiently checked before they are offered a financial package?
Along with these specific challenges, there are other regulatory requirements which apply across the whole finance sector, including compliance with anti-money-laundering (AML) regulations around terrorist financing and screening for sanctions and politically exposed persons.
“Car dealers are being targeted by criminals making fraudulent car finance applications using fake documents and even fake identities to acquire and steal new vehicles.”
"The volume of reported fraud has increased by 41% in the last 12 months, according to the National Vehicle Crime Intelligence Service (NaVCIS), which was launched 10 years ago with finance from the Finance and Leasing Association (FLA).”
AMOnline, Motor Finance Q&A, 21st June, 2017
Risks include:
At the moment, many companies in the sector have few or no solutions to these challenges, let alone a complete solution. Others have partial solutions, but as the challenges become more complex and sophisticated their existing systems are unlikely to be sufficient. Asset conversion (theft or sale, usually abroad).
SIRA is one of the strongest defences against financial crime and is successfully deployed by a large number of insurance and financial service companies throughout the world. Its benefits are now being enjoyed by a growing number of motor finance providers and aiding dealers to implement a more effective financial crime strategy:
Real-time
Applications can be screened against a variety of different checking services to provide a real-time response to determine if the prospective customer is genuine or not. This feedback can be directly integrated into your decision engine, which improves and speeds up the customer acquisition journey, enabling you to offer to your networks and dealers before your competition, whilst mitigating both financial crime and credit risk from your book.
Match to known cases of fraud
SIRA matches data against over 2 million known fraudulent records in our syndicated database National SIRA - across both the finance and insurance sectors to identify potentially risky customers before you write their business.
Third-party data services
Via sophisticated rules, workflows and APIs, businesses can incorporate a number of third-party data sources into their SIRA system. This can provide a greater degree of sophistication in deciding on the financial status of those customers seeking car finance as well as helping identify vulnerability, affordability and their overall legitimacy.
Examples of data sources that can be integrated with SIRA include: the Dow Jones Watch List, data held by Cifas, intelligence from the Insurance Fraud Bureau, National Fraud Initiative data and criminal intelligence.
A multi-layered approach to financial crime prevention
As businesses grow and new threats emerge it's vital that companies have a multi-layered approach to financial crime prevention and continue to evaluate their defence systems. SIRA fully integrates with Orion - an advanced network visualisation tool and Precision, a sophisticated predictive analytics solution to give businesses a truly integrated approach to financial crime defence.
The SIRA solution can be customised to your exact needs by incorporating a number of different services to satisfy:
ID and verification ensuring you are dealing with the genuine customer by utilising checks against bureau data and mobile, device and email information.
Anti-money laundering and compliance - ensuring regulatory requirements are met by performing all of your statutory checks at both point of application and throughout the customer lifecycle.
Enhanced due diligence enabling you to expand your broker or network reach by ensuring firms you work with are bona-fide, and, via ongoing screening, ensuring that any changes in circumstances are notified to you to manage risks before they manifest.
SIRA gives you and your dealers another significant competitive advantage too, which is demonstrated in a piece recently published by AM Online:
If the criminals are identified immediately, they will move on to a more vulnerable provider and system - they won’t give up. With SIRA, you and your dealers are protected from the start.