Ricardo Duhart
Director of Automotive Financing and Mortgages
BBVA Bancomer
View from the Top

Digitalization the Path to Streamlined Customer Experience

Sat, 09/01/2018 - 09:49

Q: Car sales suffered a slight contraction in 2017. What are BBVA Bancomer’s projections for the number of loans granted in the domestic market?
A: We expect sales in the domestic market to be flat in 2018 and perhaps 2019 while prices stabilize and salaries recover. Purchasing power has fallen due to the increase in inflation while salaries have not been adjusted accordingly. We do not expect the 16-18 percent growth rates we have achieved in previous years but demand will grow once these changes are absorbed. Mexico has pent-up demand that has accumulated for several years and will remain so until people regain the necessary purchasing power to re-energize vehicle sales.
Q: What strategies has Bancomer implemented to maintain its leadership?
A: BBVA Bancomer has over 15 years of specialized business experience in the automotive industry. We were the first banking institution in Mexico to establish a special model for the automotive sector. The vehicle financing market does not work like the traditional banking sector, where credits are traditionally arranged in bank offices. Clients in the automotive market arrive to an external location — the dealership — and expect to receive an expedited and efficient service. Bancomer is strongly investing in technology to simplify processes and improve customer experience to deliver an integral service both at the salespoint and through digital channels.
Q: How are you closing the gap with the leading financial entities in the market?
A: Banks and OEM financial units are not competing on an equal footing. These other financers tend to offer preferential prices supported by their parent company, which prevents fair competition on the sales floor. That being said, we have two significant advantages that enable BBVA Bancomer to compete against the financial arms of automotive companies and which have helped us gain a significant presence in the Mexican market. On the one hand, the bank has installed simple processes for credit approval within dealerships. BBVA Bancomer only requires its customers provide an ID and a credit application and the bank can give them an answer within 30 minutes. Efficiency is crucial for maintaining the emotional nature of car sales. On the other hand, BBVA Bancomer has one of the largest client portfolios in Mexico. We usually know our customers better that our competitors and provide pre-approved loans to them. When clients arrive to the dealership they already have an approved plan to purchase their car. To boost our market share, BBVA Bancomer has also become the financing arm for several brands that operate in Mexico. Coupled with our financing models, the bank has fast and efficient processes and a large client base that helps us pump our partners’ sales.
Q: What was the reasoning behind the creation of digital financing options such as the “Crédito Digital para Auto?”
A: For BBVA Bancomer, process digitalization is a key to remaining successful in the vehicle financing market. Any company that fails to digitalize its customer experience is condemned to fall behind. Moreover, we see digitalization as the future not only for banking but for several industries. Digitalized processes empower clients to make decisions on their own instead of depending on third parties. BBVA Bancomer’s goal is to make vehicle financing so easy that clients do not feel it.
When a person buys a car, they want to feel the emotion of buying a car. Yet, credit processes are usually so difficult that they kill the overall experience.
Potential customers have already done their vehicle research online and are perfectly informed when they arrive to the dealership. Building on those circumstances, BBVA Bancomer can make a customer’s life easier by inserting itself into the digital part of the car-purchasing process. Today, it is possible to customize every detail of a vehicle through a brand’s webpage. However, to apply for financing it is necessary to go back to the stone age and use piles of forms and papers. In the end, our goal is not to sell a loan but to help people buy a car.