Do brokers need to disclose commission from lenders to their customers?

The recent Court of Appeal judgment (Wood v Commercial First Business. March 2021) appears to make it much more likely that a loan will be rescinded in cases where a broker was paid a commission by a lender, which was not disclosed to the borrower.

In a one hour webcast David Betteley will be interviewing an expert panel to discuss the implications for brokers and their funders as they consider whether or not to change long established business practice.

• Understand the real implications of the case.
• Fifteen minute briefing from Jo Davis, co-founder, Auxillias on Wood v Commercial First Business.
• Assess the experts views in a 45 minute moderated discussion lead by David Betteley.

All delegate questions will be answered by our panel – either during or after this event.

Topics to be discussed will include:

• The likely future implication for lenders and brokers as they seek to reduce risk, treat their customers fairly and stay competitive
• How lenders and brokers perspectives vary, and the experts' views on the best way forward
• Advice from equipment finance associations including the NACFB and FLA

Deloitte’s 2021 Global Automotive Consumer Study suggests that the future preference of buying vehicles in-person versus on-line is still to be determined with the majority of customers still preferring the in-person experience. Yet as Murad Baig, Chief Product Officer at Otoz, a subsidiary of NETSOL Technologies points out the US largest dealership group AutoNation Inc still has a market cap of $7.6bn compared to Carvana’s (online car buying marketplace) market cap of $52.6bn shows that customer preferences are changing.

Find out Murad Baig’s point of view on which auto retail model will prevail, and understand the implications of these findings for auto finance providers.

Murad Baig is Chief Product Officer at Otoz, and a formerly led Fintech & Disruptive Technologies at Deloitte. Otoz announced this month (June 2021) their implementation of a true end-to-end e-commerce platform for MINI USA (OEM) and MINI Financial services. Otoz was selected because it was able to bridge gaps in existing the automotive retail process. This new platform can help OEM’s get the increased value they are seeking as they increasingly focus on direct to customer models as their preferred retail model.

Otoz are specialists in developing digital-first automotive retail and mobility solutions for OEMs, dealerships, and start-ups to further facilitate seamless customer and dealer engagement.

Key topics to be covered in this interview will include:

• Understanding the competitive advantage from agency and why direct to customer platforms seem likely to deliver more customer data and customer insight
• Learning why subscriptions and rental products represent a challenge for dealerships, and whether direct models work better
• Predicting how the future range of mobility products from daily rental to leasing (contract hire) may work together to deliver a comprehensive mobility solution for customers.

Heidi Bauer, chief operating officer and co-founder of Otoz Mobility, NETSOL Technologies’ mobility and digital retailing arm, has a unique perspective on the development of auto finance. After serving as a consultant for Mercer Consulting in Dubai, she launched fromcash2car, a start-up in Germany focused on digitalizing auto financial services. Most recently she co-founded Otoz, a b2b technology start-up that enables automotive companies to launch mobility services and seamless digital retailing solutions. Her mission has remained steadfast, to provide consumers with seamless, digital and transparent access to mobility.

Heidi has her own clear vision for the future of the industry – its third horizon; and has become an authoritative commentator on how companies across the sector are rapidly transforming to meet consumer needs. McKinsey and Company strategy consultants describe the transformation process from the current industry state (horizon one) to next generation models (the third horizon) through a transitional second horizon, that encompasses emerging opportunities, including rising entrepreneurial ventures likely to generate substantial profits in the future and require considerable investment now.

In a one hour interview with Heidi, David Betteley, content leader for auto finance at IAFN will explore horizons two and three, drawing from her experience across the Americas, Europe and Asia/Pacific in traditional auto finance, as well as innovative auto and mobility technologies.

Topics to be covered in this interview will include:

• Subscriptions as a stepping stone that delivers flexibility and exclusive use of a car
• The changing role of dealerships in an increasingly digital world
• What are the lessons we have learned so far? Who is leading the way?
• What should leading auto finance organisations do now to dominate in the emerging auto finance landscape?

Fireside chat series: Richard Jones, Managing Director of Motor Finance & Leasing, Lloyds Banking Group

What does the chief exec of UKs largest auto finance provider know about the future of UK motor finance?

Here is your chance to find out! Members questions answered by Richard Jones, managing director of motor finance and leasing at Lloyds Banking Group.

From midday (UK) on 24th May for exactly one hour, David Betteley head of content at IAFN will be talking with Richard Jones, managing director of motor finance and leasing at Lloyds Banking Group about the issues which are keeping senior auto finance industry execs awake at night.

IAFN delegates will direct David’s questions. We expect these will include some or all of the following:

• How the role of dealerships is changing and what that means for point of sale finance
• When and how and if finance companies expect to make money from financing electric vehicles
• Understanding the opportunities and challenges from the shift to PCH, subscriptions and mobility
• The role of banks as the focus of auto finance shifts from selling products to selling services
• The long term effects of the pandemic on the auto industry
• Impact of changing regulations on onboarding and collections (Vulnerability)

Want to join?

To register to attend click on the button and complete the form or simply reply to this email.

To ask a question, anonymously or attributed, email This email address is being protected from spambots. You need JavaScript enabled to view it.

We will include as many questions as we can – selecting the most popular and most entertaining when we have to choose.

• Original research by IAFN on the potential for using real time data in auto finance to improve key processes like assessing credit risk and managing defaults
• Insights from Alfa iQ director, Blaise Thomson, former chief architect for Siri Understanding on emerging technologies which determine the next best action
• Methodology insights from ctrl-shift  to determine and discuss the best use cases for real time data. How to manage innovation in a risk environment

Expanding the Horizons: Holding assets for longer

For a long time the automotive industry has been protected from disruption with high barriers to entry thanks to massive scale and manufacturing advantages, trusted brands and regulatory inhibitors. Digital disruption is beginning to lead to rapid transformation of the sector, bringing challenges and opportunities.

With a growing interest in the automotive finance industry in holding assets on the balance sheet for longer than first life-stage only, the industry’s vision is gradually moving from the business of selling many cars to one customer, in favor of selling one car to many customers. This strategy can allow captives to test a variety of fleet solutions and eventually implement them in a portfolio of products.

Based around IAFN research commissioned by Sopra Banking Software, this event will explore the new strategies that fit with this vision, such as subscription and car sharing services, leading towards not only Car-as-a-Service, but eventually Car-as-a-Platform. 

Following an introduction to the research by the author, Valerio Iannucci, which involved in-depth interviews with industry executives, you’ll have a seat at the table for our industry roundtable discussion with a chance to put your questions to the panel.

Register now to be part of the conversation!

An industry only, private event for asset finance professionals to attend during the lead-in to Xmas. 

Light hearted and fun – but also with a serious purpose. 

• Chairman: Adrian Dally, Head of Auto Finance, FLA
• Speakers : TBA

This event will be enjoyed most by UK consumer and business auto finance professionals – but all finance folk are welcome.

• Winner takes all: Judged by the audience to be most entertaining, insightful and persuasive the winning contributor will win a case of champagne. 
• Mace format: 7 minutes for each speaker first proposer; first opposer; second proposer; second opposer; questions/points from the floor (up to fifteen minutes) which can then be answered in summing up. Opposer sums up; proposer sums up. Points of interest stop the clock but cant be raised in the first or last minute of each speech. 
• Voting: Audience will vote before and after for or against the motion to identify which team achieves the greater swing.

Post pandemic, will you be ready to succeed in a customer-focused, environmentally sensitive, data-driven world?

From online services to environmentally aware finance models, COVID-19 has added rocket fuel to many pre-pandemic trends. Now, learn how two leading asset finance providers have harnessed the power of transformation to drive their own business forward.

In a webcast, Miles Rothbury, head of asset finance, HSBC UK, and Ian Durston, head of commercial performance, Global Financial Services, Jaguar Land Rover, will discuss:

• The Zoom generation - What faster digitalization means for personalized customer service and competitive differentiation
• Sustainable finance models - The growth of the circular economy and opportunities to develop pay-per-use and outcome-based finance
• Data is the key - Why data-driven organizations will be in a stronger position to make real-time decisions and deliver winning services

Next is Now: How human behaviour is changing and what this means for the customers of financial services today.

Human behaviour is changing at an unprecedented rate and financial service businesses are struggling to respond effectively. EY and NETSOL Technologies bring the latest thinking and cutting-edge research into human behaviour to the International Asset Finance Network to consider the implications of these changes. 

• Human Behaviour in a Post Covid-19 World
• What it Means to be Financially Vulnerable 
• What can behavioural science teach us?
• Implications for asset finance companies

The session will feature research undertaken during COVID-19 lockdown with both financial services businesses and their customers as well as reflections on what it means to step into the shoes of a vulnerable customer.

Expert Insights

60 minutes

- Industry panel

The UK’s Financial Conduct Authority will ban discretionary commission models from 2021 to end incentives for motor finance brokers and dealers to increase customers’ finance costs.

It is also changing its rules to make sure credit brokers give consumers more information about commission levels and structures.

The ruling follows a consultation by the FCA in October last year that found commission for some car retailers was linked to the level of interest charged, which created an incentive to sell more expensive credit.

Find out what this really means for dealers and finance companies in a one hour briefing from the IAFN Online team and expert panel.