a row of mercedes benz parked at a showroom

If banks are waiting for a sign to move their auto financing applications online, this is it. Source: Pexels.

Here’s why banks should go paperless once and for all

IN an age where you can bring down the banking system with a few lines of code without leaving your house; you still need to fill out paper forms to apply for a car loan.

A recent survey by J.D. Power showed customers that applied for auto financing with paper are less satisfied than those applying online.

Banks that are waiting for a sign to go paperless, this is it. If they remain unmotivated to go paperless soon, they will undoubtedly lose customers.

This is strongly related to the time taken for approval processes. The J.D. Power 2018 Malaysia Auto Consumer Finance Study found that users are most satisfied if approvals take less than three days.

The survey showed that two-thirds of customers who apply online have their loans approved within two business days. In contrast, less than half of those using paper forms received approvals in the same amount of time.

“Customers clearly prefer the 24/7 convenience of a self-service application platform,” said Anthony Chiam, Service Industry Practice Leader at J.D. Power.

“However, there are currently only a few providers offering online auto finance applications. Moving the process onto a digital platform can go a long way in meeting the needs of customers and improving their overall experience,” he explained.

Chiam added that 82 percent of respondents say they prefer a paperless application process for their next auto finance product.

Generally, more and more users tend to compare interest rates when selecting auto finance providers. Thus, users don’t necessarily opt for a finance provider that is the same as their primary bank.

The study found that currently, users are most satisfied with Maybank’s services. Customers rank the bank highly in interaction; onboarding; billing & payment; and origination.

A significant number of customers who are satisfied with their auto finance experience, said they “definitely would switch their primary banking relationship to their finance provider”.

This means bank loyalty is dead. Customers are expecting quick and convenient services. If banks don’t keep up by changing their operations, other providers will eat them for lunch.