Alfa’s Igor Szabados sat down with Spencer Halil, director at Alphera Financial Services, to discuss the current motor finance landscape and Alphera’s development plans for the coming months and beyond.
Spencer Halil explains that the major focus at Alphera is on the digitisation of the sales process, with the view of becoming “truly omni-channel” by the end of next year.
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With this target in sight, the company has this year launched a suite of new online features, including its e-retail, e-sign and e-ID platforms. However Halil recognises that offline services must also remain strong, providing customers with a range of service options to suit their needs.
“There is a responsibility on our lenders to make sure that customers are not forced in one direction,” says Halil. “An analogue process still exists, and is still preferred by customers at certain stages of the transaction.”
The digitisation movement has come at a time of wider change in the motor finance market, Halil observes. Referencing the recent FCA review into the motor finance market, Halil believes the follow-up announcement and regulation “could be the most profound change our industry has seen since the Consumer Credit Act in 1974”.
“We as an organisation need to be able to react to that, responding to and modifying our processes and products very quickly. While Alphera has been very open and receptive when it comes to regulation, we see it as a real opportunity to do a better job for the customer.”
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By GlobalDataCultural Realignment
A hot topic in motor finance world is the future of car ownership and the growing trend of vehicle usership models, and what that trend could mean for the market.
“The industry is in a state of transition,” explains Halil. “What we are going to see for quite some time is a multi-modal, multi-timeframe, multi-product landscape.”
Halil believes companies, including Alphera, will need to be flexible in their approaches to achieve success in the new era of car finance.
“We’ll have to be more creative as lenders, collaborating and partnering with other platforms in order to deliver different product solutions. The companies that manage to adapt quickly to the customers’ needs will use this as a springboard for future success.”
Millennials are suffering from the slow transition, claims Halil, as they have very different expectations to previous generations in terms of ownership, speed of access and online expectations.
“It’s Generation Z that are coming up behind the millennials that we need to keep our eyes on, as they will be far less forgiving than the millennials have been.”
Dealers are sitting in the eye of the storm of transition, according to Halil, who believes we will see a realignment in the culture and skills required across the dealership network to address changing consumer behaviour.
“The future is undoubtedly going to see dealers acting more as customer experience points where the product really speaks, rather than where someone tries to sell,” says Halil.
“That requires a massive retraining effort within the dealer body. I expect our dealers to demand much more from us as lenders in helping to deliver that.”
The Utilisation Issue
In order to succeed in a world of usership and subscription models, Halil believes firms must solve the mystery of utilisation – which could in turn create a boost for the used car market.
“There is a reason why people cannot use daily rental options for a sustained period of time, and that’s because it will get too expensive. The new models need to be presented in a way that is still affordable for the user. If you have 100% utilisation of the car, which with rental fleets you don’t get, then it becomes affordable to have a much lower price position.”
Halil sees the shift to subscription models as a real opportunity for the used car market to maximise assets that are often collecting dust at the moment.
“We have a lot of used cars sitting in fields or dealer lots or in distribution centres not doing anything,” he notes. “Whoever figures out how to maximise utilisation on those cars will be closer to solving the subscription challenge.”
by Igor Szabados
