The lending industry is currently navigating a period of uncertainty due to various factors, including regulatory ambiguity and geopolitical shifts. This environment has resulted in lenders reassessing their risk management strategies amid concerns over rate stagnation, rising delinquencies, and increasing borrower-driven fraud in auto lending.
Allied Solutions advises members of the American Financial Services Association (AFSA) to maintain focus on critical risk management priorities despite uncertainties at both federal and state levels. "At the end of the day, enforcement may change hands, but the rules of the road won’t," Allied Solutions states.
To remain consistent and compliant, Allied Solutions suggests that lenders should not be distracted by current uncertainties. Instead, they should continue to aim for balanced portfolios and improved recovery efficiency while keeping an eye on broader geopolitical issues without losing sight of their primary goals.
Lenders are also encouraged to address operational gaps caused by a significant reduction in repossession agents due to pandemic-related moratoriums. By using advanced recovery tools such as insurance status verification and AI-powered collections, lenders can enhance their operational efficiencies. These tools help reduce cycle time in collateral recovery processes and increase overall recovery dollars.
Furthermore, maintaining borrower-centric practices is essential. With consumer protection being a priority amidst potential regulatory reforms, it is important for lenders to focus on refunding GAP waivers and other ancillary products proactively.
Allied Solutions provides comprehensive solutions for auto finance companies and financial institutions across the US. They are headquartered in Carmel, Indiana, with multiple offices nationwide. As part of Securian Financial Group's subsidiaries, Allied Solutions brings over 100 years of industry experience through technology-based solutions tailored for 6,000 organizations.