In February, Asset Finance International reported on e-commerce solutions provider iVendi’s first forays into the German motor finance industry. Now, James Tew, CEO of iVendi has spoken with AFI in an exclusive interview about their new deal with Bank Deutsches Kraftfahrzeuggewerbe.
iVendi’s first international deal is a major one - a complete online marketplace for Hamburg-based Bank Deutsches Kraftfahrzeuggewerbe (BDK), a subsidiary of Société Générale.
BDK, which serves around one-quarter of all car dealers in Germany, offers a product range including dealer financing, retail loans and retail leasing for new and used cars, along with insurance and warranty products.
iVendi’s technology offers access to pre-approval for all 4,500 dealers who currently use BDK for motor finance, as well as a search function that will provide results based on vehicle, payment and location - shown on a geographical map to help customers in their hunt for a new vehicle.
The new dealer platform is set to be rolled out to BDK's dealer network during 2019.
AFI: Traditionally, German lenders stick to German software companies, so what do you think BDK was most impressed by with the iVendi software?
James Tew: “During our very first conversations with them, the challenges we face here in the UK quite clearly resonated with BDK. They had experienced similar issues to us and once we started working together on solutions, they could see how we tackle situations head-on.
“No doubt there are different challenges that a German company faces compared to a British one but there are also similarities relating to meeting the needs of car buyers who want to do more of their transaction online.
“Once we overcame the language barrier, BDK could see the passion, and the deep business knowledge we have when it comes to the UK motor finance industry and they understood how that related to the challenges they were facing in Germany.”
AFI: Does the British experience of operating in a heavily regulated market help?
James Tew: “Our view today is that the UK motor dealer is the most regulated dealer in Europe and I think the way that we’ve overcome a lot of these challenges in the UK translates into some of the other markets immediately. The Germans look at us and can see that their regulators are talking to the FCA and other EU regulators about the implementation of the EU Directive and best practices.
“Take the recent regulation around GDPR. It’s obviously aligning data protection across the EU. How we’ve overcome these challenges in the UK is very portable to other EU states.
“As a business we’ve invested heavily in our infrastructure and security and this is now starting to reap rewards. Our solutions have been fully scrutinised and audited by independent security and cloud experts. This gives huge confidence to banks as they embark on their digital transformation.
AFI: How do you think British technology compares on a global basis?
James Tew: “When we look around the world at other regions, we see different systems but we don’t really see any better systems. Our motor finance technology is strong and I think that goes back to what we’re good at in this country. We’re a nation of innovators and traditionally always have been.
“At iVendi, our differentiators are creativity and a deep domain knowledge. It probably comes down to myself and my business partner, Richard Tavernor, who are very deeply-rooted in the motor finance and vehicle retailing industries. That in-depth knowledge is very much embedded in our thinking.”
AFI: How does BDK’s motor finance pre-approval work in relation to iVendi’s software?
James Tew: “BDK already had a pre-approval solution to handle customer affordability for their product, so what we have been able to do is focus specifically on the search for a vehicle, then finance, and integrate all of these functions.
“The consumer does it all themselves online. Let’s say that I want an economical hatchback for between €200-250 a month. I have €2,000 to put down and I want to buy one near Hamburg. I’ll run the search and we’ll bring back all the vehicles that are relevant based upon the user criteria.
“When the consumer sees a vehicle they like, they can go through a process to see if they’d be approved for finance on that vehicle based upon their own income and a few other factors.
“Our software also enables the consumer to request a test drive and make any additional enquiries on the vehicle. All the information is passed to the dealer and therefore makes it easier for them to sell their car with the BDK finance product. We also promote the sale of credit insurance and GAP throughout the journey so it’s essentially a pre-approval and affordability calculator.”
AFI: Will iVendi have a team working alongside BDK in Germany?
James Tew: “We don’t have an office in Germany at the moment - although we envisage opening one at some point - because the International Platform that we have built is designed to be a true Software-as-a-Service (SaaS) solution. At the moment, first line support will be managed through BDK and we’ll provide second and third-line support through our offices in Colwyn Bay and Manchester.
“The new platform essentially splits into three main parts:
• The Consumer Platform manages the vehicle search, finance, pre-approval, enquiries and the test-drive. It condenses the entire dealership experience into a single digital journey for the customer. Within our roadmap we plan to further digitise the sales journey, so watch this space;
• The Dealer Platform allows the dealer to do a number of things but mainly administer aspects such as controlling interest rates and quoting on the marketplace. They can also view the relevant finance rate that goes with each product;
• The Lender Platform allows BDK to manage the entire system. The dealers have a third-party who manage their digital stock and broadcast it to the marketplace. We receive that stock information and BDK map the stock feed to the correct dealer and set-up an account for the dealership so they can manage their finance through our platform.”
AFI: For the future, does iVendi have any plans for further expansion into mainland Europe?
James Tew: “We are currently in talks with a number of companies across Europe, predominantly lenders and OEMs. It’s a little ironic, as everyday now we’re hearing how Britain is leaving the EU but iVendi are actually moving closer.
“As a business, we see Europe as a great opportunity. We now have relationships not just with BDK but with BNP Paribas in the UK, meaning we work with two very large French banks that operate extensively across Europe. It gives us an excellent jumping off point for the future.”