The Medium is the Message

The Medium is the Message Informed

When considering the impact of robotic process technology (RPA) and other AI techniques on the auto lending business, I’m reminded of media critic Marshall McLuhan’s famous concept:  The medium is the message.

McLuhan astutely observed that the medium used to communicate information affects how it is used.  For example, Twitter confines users to about 280 characters, which forces tweets to be concise and to the point. 

It’s interesting to apply this lens to Informed.IQ’s innovations in digitizing and interpreting auto loan deal jackets.   Through RPA, ML tools, and advanced analytical techniques, we’ve changed the communication flow of loan applications. Consumers, lenders, and dealers can now share documents and data in a variety of ways.

Certainly, Informed’s AI technology turbocharges  traditional review processes done with paper documents.  Instead of several weeks to review a loan jacket, we enable lenders to review an individual loan application in minutes.  With faster lending decisions, lenders can cycle through more loans and more loan opportunities. Dealers get paid faster, and consumers get quicker feedback on their applications.

But these technologies are more than faster versions of existing techniques.  They change the nature of how loans can be viewed, dramatically expanding the tool set of a loan analyst.

Some Examples

 Imagine having, as a lender, the ability to instantly assess income from the loan documents, according to your rules. This is regardless of how the applicant earns their salary wages.  It changes the types of applications you will accept.

Similarly, as a compliance professional, I see the tremendous prospect of enabling lenders to cheaply and confidently assess loans compliance on a number of vectors. Imagine having the ability to:

  • instantly confirm, with an auditable record, that a car loan contains the required Truth in Lending Act (TILA) content such as amount financed, itemization of charges, annual percentage rate, finance rate, etc.
  • instantly check that a loan meets the financial standard of AB 2311 requiring that GAP waivers cost less than 4% of the amount financed?
  • assess instantly, by dealer, whether the dealer charges doc fee or other fees that are below State statutory caps.

Playing this logic forward, one can posit that the digitization of loans in indirect auto lending is going to dramatically change how loans are going to be issued.  Speed of decision will increase.  But so will transparency.  Lenders, dealers, and consumers will all get a much better insight into the application process.   And this transparency will drive competition, spurring more innovation.

Yes, the medium is the message.  And the message is – brace yourself for a bunch of changes in the business of indirect auto lending.

author avatar
Tom Oscherwitz VP of Legal
Tom Oscherwitz is Informed’s VP of Legal and Regulatory Advisor.  He has over 25 years of experience as a senior government regulator (CFPB, U.S. Senate) and as a fintech legal executive working at the intersection of consumer data, analytics, and regulatory policy.

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