Informed.IQ, a developer of AI-based software that verifies, streamlines and optimizes loan processing, has commissioned a survey of auto finance executives to identify the key areas where they are leveraging Artificial Intelligence into their workflows and processes.

Financial Institutions and auto lenders have been using AI software to make their operations smarter, cheaper and faster, yet there is a lot the industry can learn from the following implementation trends and insights. Today’s new AI-powered compliance software spots common defects during the loan origination process for F&I add-ons, GAP waivers, or debt cancellation agreements, according to Informed.IQ. 

Additional Key Highlights from the Survey:

• 95% of lenders are beginning to leverage AI tools in some aspect of their business (i.e., credit decisioning, loan servicing).
• 51% of lenders cited regulator audits as their biggest concern.
• Nearly 44% of lenders are interested in leveraging AI to compete with lenders who are also using these tools.
• 29.7% of lenders said the top metric automation has improved in the lending process is reduced cost.

Auto lenders can more stringently mitigate defect scenarios through the implementation of AI-powered systemic controls that help them avoid audits. The vast majority of lenders do not have systemic controls in place to audit the contents of contracts and deal jackets. However, lenders are looking at implementing these controls either through added in-house staff, which is difficult in today’s tight labor market; relying on existing manual controls, which often are susceptible to human oversight or errors; or through external vendor partners who provide AI-based software-as-a-service solutions to automate much of the process.

According to the survey findings, nearly half of respondents (43%) said deal jacket errors cost them approximately $1 million during 2022.