In the third of three blogs supporting our recent white paper on how financial providers can find success in the motor finance industry, I’m looking at ways providers could harness data and become indispensable for connectivity in drivers’ everyday lives.
The development of electrification and connectivity in cars has been driven largely by the original equipment manufacturers (OEMs) themselves, delivered in the cars they build, responding to market developments and changes in customer preferences and behaviour. Innovation in the delivery of financial products and the services around them rests with the providers of those products and services; that is, the motor finance and leasing industry.
Embracing joined-up thinking
As well as shifting the emphasis away from the metal and towards the services, there also needs to be joined-up thinking around the nature of the services and the realisation that these do not necessarily have to relate to the car. Of course, some will, most obviously the opportunities afforded by electric vehicles and charging them, whether in funding home-charging equipment or building partnerships with charging infrastructure suppliers or even the energy providers themselves. The combination of usage data via improved connectivity means charging opportunities can be optimised according to proximity, time of day, provider costs, average journey times, distances and so on.
But with all this information on where a vehicle is and for what purpose, other services could theoretically be offered to optimise customer convenience and experience:
- Is the car the best means of getting them to their destination?
- Is that car the optimal vehicle for their destination?
- Do they even want or need access to a car when they get there, or is it going to be lying idle for some time?
- Could we offer access to public transport or shared mobility as part of a service, or parking, or connect to the grid and provide unused/unneeded electricity back while the vehicle is idle at peak times and re-charge when costs are lower?
- What accommodation is available?
- What entertainment is on in the local area and where is a good place to eat or drink?
Gathering data to improve services
In the case of mobility solutions, tracking and location-data are integral – most subscription and shared-mobility vehicles are fitted with trackers – so privacy rules need to be robust and anonymity in particular must be assured. OEMs remain reluctant to share vehicle data, but a fleet operator will have more influence and buying power.
Through their provision of multiple services associated with the vehicle-use and their interest in aggregating data from multiple sources, there is an opportunity for the motor finance and leasing industry to promote itself as a 'neutral host' for all this data – the customer’s interests are served via attractive pricing and the OEM’s interests are served via access to additional (anonymised) third-party usage data.
Vehicle usage data and customer driving behaviour can be combined with many other data sources, ones that may not just be relevant to the consumer in terms of pricing, but also to the optimisation of the motor experience in general.
Becoming a service drivers can’t live without
A business that combines the roles of financial institution and mobility provider would be well placed to become an indispensable part of a consumer’s daily life. It would also be better positioned than a social media platform to provide tangible products and services of value to the average consumer. It would need to demonstrate value with genuine tailoring and personalised offers, learning from the data it gathers and optimising services in real time.
Utilising the connectivity available in all new vehicles today, such a service provider would keep its customers mobile 'on demand', as well as accurately informed of opportunities relevant to them – whether on the move at that moment, or looking ahead to likely future destinations, which the provider would already know about by way of the customer’s own input or from their past behaviour.