New Survey Shows Where Automation And AI Increase Lender’s Operational Efficiency

New Survey Shows Where Automation And AI Increase Lenders Operational Efficiency Informed

Informed’s 2024 Auto Loan Survey Defect Report is out and shows that deal jacket errors are costing lenders millions and that many C-Suite Executives are still trying to understand the benefits of AI and automation.

A majority of this year’s survey respondents said GAP refunds (25.3%), regulatory compliance (22%), delinquencies (21%), and fair lending (21%) were the topics most concerning to them entering 2024. Nearly half of respondents (44%) said they haven’t incorporated AI into their lending because their C-Suite still hasn’t fully bought into the idea, and another 30% said they still aren’t operating in a fully digital environment. You can read the whole report here.

Key trends in deal jackets and loan defects

The majority of respondents (31%) said they want to improve dealer satisfaction as a reason to adopt more automation or AI tools for deal jackets; followed by 26% saying they want to compete more aggressively with other lenders.

  • Employer mismatch (26.3), income mismatch (24.2%), and missing signatures (23.2%) represent the biggest challenges when it comes to documentation defects today.
  • The majority of respondents (44%) said that less than 10% of their deal jackets had defects in 2023; roughly a quarter of respondents said 30% of their deal jackets.
  • Another 44% said errors in their deal jackets in 2023 cost them an estimated $1 million in 2023; Nearly a third (30%) said deal jacket errors cost them between $1M- $5M in 2023.
  • When it comes to the accuracy of deal jackets, 46% of respondents said they are most concerned about increasing the number of staff hours to scrutinize accuracy and/or rectify errors.

By incorporating advanced automation into lending procedures, lenders make more informed and timely decisions, reduce operational costs, and provide an unparalleled experience for their customers.

Key trends in automation for lenders

  • The majority of respondents (21%) said automation has reduced fraud in their lending process; following by 19% who said increased speed.
  • Regarding the measurement of success of automation, most respondents (32%) said it has improved customer satisfaction; followed by 30% saying reduced turnaround time.
  • Forty-two percent said they plan to upgrade existing automation systems in their future plans; followed by 31% saying integrating with other systems.
  • While 41% indicated budget concerns, another 35% said they are concerned about the lack of knowledge or expertise in making additional implementations.

“This report shows that we’re making progress in the industry, educating lenders on the opportunity and promise of everything AI and automation can do for workflows, deal jacket accuracy and customer improvements,” said Justin Wickett, Informed CEO. “The future of lending is rooted in data, accuracy, and customer satisfaction, and AI and automation are keys to unlocking that future. It’s not just about embracing innovation; it’s about leading the charge toward a more agile and responsive financial ecosystem.”

You can view last year’s report here.

author avatar
Adine Deford VP of Marketing
Adine Deford is the VP of Marketing at Informed.IQ. She has more than 25 years of technology marketing experience serving industry leaders, world class marketing agencies and technology start-ups.

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