AI takes center stage at Auto Finance Summit 2024 as industry embraces innovation 

Artificial intelligence (AI) was the dominant topic at the most influential automotive finance conclave of 2024 — the 15th annual Auto Finance Summit (AFS), held this year in Las Vegas. AFS has often set the tone and agenda for what’s on the big-picture automotive finance horizon, and the signs all point to a significant boom in this space. That was clear in the sessions covering interindustry synergies, below-the-radar regulation and sharing economy disruption.

At this year’s summit, it was notable how lenders were becoming much less hesitant about the use of AI to automate decisioning, underwriting and funding. We could see from the presentations that the majority of institutions were focused on using the technology to help them operate more efficiently while still managing significantly larger loan volumes. 

“We are at an inflection point for AI adoption in the industry,” Mike Lavin, chief operating officer of subprime auto lender Consumer Portfolio Services (CPS), put it, as part of the ”Executive Dialogue on the Future of Auto Finance” panel, where he was joined by senior industry leaders from JP Morgan Chase, Santander Consumer USA and Westlake Financial. Top industry challenges the leaders discussed included inflation and restricted credit markets. 

Meanwhile, CPS grabbed the spotlight at the summit with the announcement that it had integrated Informed.IQ’s Dealer Verify loan origination tool, an AI-powered solution that has already increased the CPS same-day funding by 100%, according to Teri Robinson, the firm’s executive vice president of sales and originations.

Maintaining compliance

Compliance with regulatory guidelines remained a dominant theme. Numerous sessions addressed the challenges of meeting consumer protection requirements, data-privacy rules and ancillary product compliance. Lenders are besieged by complex regulatory obligations, which encourage and enable competition and innovation, yet must be navigated carefully if lenders are to avoid crippling fines that could bankrupt them.

Beyond presenting an opportunity to engage in dialogue with regulators, the summit also facilitated collaboration across industry players, including financial institutions, technology providers and OEMs — partners who could explore technology innovations, sharing insights and best practices to demonstrate how to conduct auto finance in a regulatory-friendly manner.

Keys to success 

The Women in Auto Finance Luncheon, sponsored by Informed.IQ, featured a keynote speech by Ting Cui, executive director and department head of corporate strategy at Hyundai Capital America. The focus was on putting women front and center in the auto finance industry and the direction of innovation going forward.

“Right now, in the face of such a challenging environment for auto finance, we need multifaceted perspectives and brainpower more than ever,” Cui said.

The message to auto finance, as the industry looks toward 2025: If you want to succeed, you will need to focus on developing technological solutions as well as strong compliance cultures and management. The warm welcome for AI solutions and the focus on regulation suggest there’s a shift afoot in how auto finance companies operate and how they serve their customers.

The key takeaway for many attendees was that the auto finance industry is no longer just iterating buzzwords about innovation, but actively implementing it. AI tools, as CPS has shown, are evolving to become more integrated into companies’ systems, moving from discussion to application, and establishing standards for service and efficiency.

For some, Auto Finance Summit 2024 highlighted the moment at which AI moves from interesting tech toy to essential tool in the auto finance toolkit — and a new phase of the industry begins.

Jessica Gonzalez is the director of lending strategies at Informed.IQ and has more than 15 years’ experience in the financial services industry, including tenures at Santander Consumer USA and Visa. 

Content sponsored by Informed.IQ.