"Operationalize servitization in auto finance." That's the awkward new phrase that tells us how to save our industry.
At first, the concept seems simple: car use is moving from an ownership model, with a single user for a single vehicle, to a service model, which offers users many options for access to mobility. But the deeper you go, the more complex this phrase becomes. After all, its implementation rests on technology that hasn't yet been fully adopted.
Artificial intelligence (AI) is a great example of this. I haven't come across a sector yet in which it hasn't been touted as a panacea. And auto finance is no different. Even before COVID-19 hit, traditional auto financing volumes were set to drop by 30% in 10 years. Today, auto financiers are under even more pressure. AI could really be a game changer for the industry, helping it navigate the crisis and build resilience for the future. But first, auto financiers must embrace it fully.