BURLINGTON, Ontario -

“Today, consumers are a lot more educated.”

That’s how Jason Mosmann of RSR Global/OGI Digital began a conversation on the latest  developments in fintech and the dealer response — including how this technology creates both opportunities and privacy challenges for both consumers and dealers.

Meaning, they are increasingly embracing technology in their shopping habits and how they work and make purchases. 

“So, if a finance office or a dealership can make that easier, and the faster they get right to the point, the better,” said Mosmann, who is director of business development at RSR Global/OGI Digital.

The dealership needs to embrace ways to maintain their gross averages, and still meet consumers where they are today.

Mosmann pointed out that 10 to 20 years ago, consumers were still visiting five or six dealerships to conduct research, before narrowing it down to a make, model and a particular store to make their purchase.

“Now when they walk in, they’ve done all their research online; they know all the rebates; they know everything there is to know. In fact, they know more about the car than the salesperson a lot of times, because they’ve spent so much time researching what they’re going to buy before they stepped in,” Mosmann explained.

He thinks dealers definitely need to embrace new technology that makes it easier for their clients to buy vehicles, close loans and more. And this is especially important in the F&I department,  he says, 

“They (customers) know they’ve got to do a credit app, but other than that, they just want to get in and get out,” he said. “It used to be that a client would sit with finance 40 minutes or so. Now, they want to be in and out in 10 minutes; they want to do everything quickly. So, any technology that can help that dealership achieve that goal, and still present all of their products, is a good thing.”

Identity protection — a 21st century challenge

That said, many new, innovative tools in auto retail, especially those especially those used in the F&I and loan process, present their own set of challenges for dealers and loan officers. One of these is identity protection, in light of the data-heavy quality of many of these tools.

This, of course, is an issue for the consumer sharing their credit information, which often happens online. It can also be an issue for the dealer, bank or third- party who’s inevitably storing or housing this information, even for a brief time.

RSR Global is very conscious of this concern, says Mosmann. The company offers its GLOBALid  identity theft protection, restoration and recovery service, which helps victims of fraud and identity theft and those who are interested in protecting their identity, to combat this challenge.

“I mean privacy is a huge issue, and identity is a massive problem that I think in a lot of cases people don’t realize,” he said.

Or don’t embrace protective services as much as they should. Whether they just want to ignore it or don’t think it’s a problem because they haven’t personally been affected, he doesn’t know.

“I think that the dealership’s first and foremost job is to protect their clientele’s privacy,” Mosmann said.

And he said dealers need to be careful when buying leads, a common practice, and only collect or store information when truly required.

“They just need to ensure that where that data is coming from is secure and backed up and know the companies they’re dealing with ahead of time,” he said.

A growing issue

The conversation quickly turned to AI, automation, data mining and more — not surprising, when discussing big data, and who truly “owns” this data. 

Although consumers want convenience at the dealership, some are still wary of privacy concerns. Data techniques continue to move forward, but the gathering and management of large amounts of personal data raises red flags across the auto industry and beyond. 

That said, it seems consumers aren’t too concerned about providing personal information to auto dealers pre-purchase or dealer visit, as long as that information is put to good use. About three out of four consumers (74%) feel that a personalized experience at the dealership is important, which often requires the sharing of data pre-visit.

This is particularly true with younger generations, where 87% of people ages 18-24 and 81% of people ages 25-34 say a personalized dealership experience is important. That’s according to Cox Automotive’s recent Technology and Transformation of Retail study.

Dealers also face some challenges when it comes to adopting new technology.

Sixty-three percent of dealers say that to adapt to changing pressures they face, adoption of automation or AI is necessary. However, only about half of dealers know “a lot” about these technologies, according to the same Cox study. And they need to ensure they remain compliant amid a shifting regulatory environment.

Will this technology, although ideal for increasing convenience, speeding up purchase times and easing the credit process, increase the focus on which the industry needs to give to protecting consumers’ data and identities?

Mosmann says there’s no question: Yes.

“We see privacy breaches or issues all over the place consistently, right? Whether it’s Facebook selling data or Amazon … or the Equifax breach. There are privacy breaches consistently on a daily basis,” he shared. “it’s an ever-growing problem … and a difficult one to solve.” 

Mosmann pointed out that cybercrime and a large portion of online identity theft crime also crosses borders, making it even more difficult to detect and/or bring to court.

One of the largest recent data breaches in history, of course, was the Equifax data breach in the U.S.,  which was settled this past summer via a comprehensive $671 million resolution that includes settlement agreements that would resolve the multi-district consumer class action litigation, as well as investigations by the Federal Trade Commission, the Consumer Financial Protection Bureau, the attorneys general of 48 states, Puerto Rico and the District of Columbia and the New York Department of Financial Services (NYDFS).

Back in September 2017, Equifax had announced that a data breach at the company resulted in the exposure of approximately 147 million U.S. consumers’ sensitive personal information, including names, addresses, Social Security Numbers and dates of birth.

Financing online — can we tackle the privacy concerns?

Government regulators in both Canada and the U.S. have had their eye on data privacy in the digital and data-driven era for years now. For example, Canada’s Anti-Spam Legislation (CASL) laws that curtailed the potential for electronic spam, designed to empower consumers, went into effect in the summer 2017.

 In the U.S., the California Consumer Privacy Act and the California Security of Connected Devices Act was set to into effect in January. The California Consumer Privacy Act gives consumers the right to know what personal information businesses collect about them, how the information is used, and to request their information be deleted; the California Security of Connected Devices Act requires manufacturers of internet connected devices to equip the devices with security features to protect data from unauthorized access and use.

As for whether the industry is ready for the potential challenges online vehicle retailing may bring to the surface, Mosmann says “we’re getting there.

“As consumers shop more and more online, they become more and more comfortable online … And I think the auto industry is no different. I think we’re starting to see more and more deals done completely online,” he said.

Although the percent of consumers in the auto-retail market willing to take the plunge fully online may still be fairly small these days, Mosmann thinks we will soon begin to see a shift.

“I think it’s definitely going to get there,” he said. “There’s no question, right. So, I think dealers need to embrace new ways of technology and doing business. And the earlier they can adopt that; I mean the better off they’re going to be long-term.”

And that means tackling the challenges that come along with new technology and innovation, too.