The personalization game – why Rate for Risk could accelerate UK car finance growth

Recent research from McKinsey shows that the power of personalization is growing and bringing with it competitive advantage.

Its Next in Personalization report found that 71% of consumers expect companies to deliver personalized interactions and the vast majority are frustrated when that doesn’t happen.

Customers tend to spend more with companies that offer more personalized service. You can generate more attractive offers as you get to know consumers better, which means they are more likely to use your services and allocate a greater proportion of their spend to you.

For UK car finance companies, this could mean now is the time for a systemic shift in the way they do business, with standardized national rates giving way to personalized finance quotes based on individual consumer data. .

This Rate for Risk approach brings complexity and disruption, but with external competitors poised to compete for market share using this approach, does the industry have a choice?

In North America, Rate for Risk has deep roots in the auto finance industry, so the International Asset Finance Network hosted a chat with Peter Minshall, Executive Vice President, NETSOL Technologies North America, to provide insight. in depth on the market and what lessons could be learned in the UK.

Minshall reviewed the building blocks of a rate-for-risk proposition and assessed the role of technology in driving its success, including artificial intelligence.

He also provided expert insight into who really benefits from a rate-for-risk strategy – the dealer or the customer.

IAFN, in association with NETSOL, has published highlights of the debate in a new report, which covers:

The fundamentals of Rate for Risk

  • Who benefits from risk-based pricing – the dealer or the customer?
  • How AI-based credit scoring could boost lending
  • Why digitization is a dealership’s best defense against fintechsTo read a summary of the discussion, download the report below or visit www.iafnonline.com to see the full discussion and a host of other debates with industry leaders.

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