Making motor finance customer validation faster and smarter in a challenging environment

As the motor finance sector continues to grow, driven by the increasing popularity of Personal Contract Purchase, the risk of financial crime becomes ever-greater too. That’s just one of the challenges facing the industry, with compliance and regulatory issues focused on consumer affordability also particularly pertinent in a highly competitive market where speed of providing finance solutions is paramount to success.

It is becoming evident that motor finance providers need to check and validate potential customers more closely than ever before, whilst at the same time delivering the swift and seamless service which the market demands. Is there a single and simple solution? The answer is yes, and it is a solution which is already delivering results.


A growing market


The challenges


Customer verification

With the developing market, and particularly the increase of Personal Contract Purchases, motor finance providers need to deliver smart solutions for customers to maintain their competitive edge. They have to be fast and flexible. This is made more challenging in the context of rapidly rising financial crime, where criminals exploit the easier access to both financial products and personal data which market trends have demanded and created.

There is a need for a solution which enables the salesperson to validate the customer’s identity and financial status in real-time, to ensure that they are who they say they are, that they are telling the truth about their circumstances, and that they are not a risk to the business.

"New business volumes in the point of sale (POS) consumer new car finance market grew by 9% in August, compared with the same month in 2017, while the value of new business was up by 14% over the same period."

  • £36.772 million (gross) lent in the twelve months to August 2018

Finance and Leasing Association (FLA) press release, 5th October 2018


Regulation and compliance

Easiness of obtaining credit is a major area of concern for the Government and the Financial Conduct Authority, too. They have responded to the changing financial and consumer landscape within the motor finance sector by conducting in-depth research to help them shape their regulatory response.

“We wanted to understand the use of motor finance products, and assess the sales processes employed by firms and whether the products could cause consumer harm.”

Financial Conduct Authority (FCA) Our Work on Motor Finance, March 2018.

One of the key questions the FCA are asking is: “Are firms taking the right steps to make sure that they lend responsibly, in particular by appropriately assessing whether customers can afford the product in question?”

In other words, are customers and their circumstances being sufficiently checked before they are offered a financial package?

Along with these specific challenges, there are other regulatory requirements which apply across the whole finance sector, including compliance with anti-money-laundering (AML) regulations around terrorist financing and screening for sanctions and politically exposed persons.

The nature and growth of fraud and financial crime

“Car dealers are being targeted by criminals making fraudulent car finance applications using fake documents and even fake identities to acquire and steal new vehicles.”

"The volume of reported fraud has increased by 41% in the last 12 months, according to the National Vehicle Crime Intelligence Service (NaVCIS), which was launched 10 years ago with finance from the Finance and Leasing Association (FLA).”

AMOnline, Motor Finance Q&A, 21st June, 2017

Risks include:

  • Evasion of payment
  • Asset conversion (theft or sale, usually abroad)
  • Application fraud (falsification of income, employer, undisclosed adverse credit etc.)
  • Impersonation / identity / fronting fraud

At the moment, many companies in the sector have few or no solutions to these challenges, let alone a complete solution. Others have partial solutions, but as the challenges become more complex and sophisticated their existing systems are unlikely to be sufficient. Asset conversion (theft or sale, usually abroad).

The solution: SIRA for Motor Finance

SIRA, from Synectics Solutions, is an all-in-one risk mitigation platform which speeds up customer finance applications by providing real-time ID verification, and anti-fraud screening, which ensures that regulatory obligations are being met, and helps you identify threats quicker, mitigate risks and maximise revenues.

SIRA is one of the strongest defences against financial crime and is successfully deployed by a large number of insurance and financial service companies throughout the world. Its benefits are now being enjoyed by a growing number of motor finance providers and aiding dealers to implement a more effective financial crime strategy:

  • Offers real-time customer verification, anti-fraud and regulatory screening
  • Provides customer due diligence to help you comply with your regulatory requirements including Know Your Customer (KYC)
  • A single, integrated, flexible and customisable solution
  • Cross referencing millions of items of data from every sector
  • Instant insight for informed decision making
  • Capable of immediate response to a changing business environment and evolving threats
  • Enables providers to make quick and informed decisions against the proposals their networks and dealers generate
  • Valid applicants are processed faster and more efficiently, enhancing customer service, while bad or high risk applications are rapidly identified with minimal use of time and resources
  • SIRA synchronises smoothly with your current strategy and makes financial crime detection fast and effective
  • Application fraud accounted for 73% of fraud recorded in the National SIRA database for car finance and hire purchase records
  • SIRA has seen over £4 billion of financial crime prevented

Drive your financial crime capabilities forward with SIRA, which is


Features and benefits


Applications can be screened against a variety of different checking services to provide a real-time response to determine if the prospective customer is genuine or not. This feedback can be directly integrated into your decision engine, which improves and speeds up the customer acquisition journey, enabling you to offer to your networks and dealers before your competition, whilst mitigating both financial crime and credit risk from your book.

Match to known cases of fraud

SIRA matches data against over 2 million known fraudulent records in our syndicated database National SIRA - across both the finance and insurance sectors to identify potentially risky customers before you write their business.

Third-party data services

Via sophisticated rules, workflows and APIs, businesses can incorporate a number of third-party data sources into their SIRA system. This can provide a greater degree of sophistication in deciding on the financial status of those customers seeking car finance as well as helping identify vulnerability, affordability and their overall legitimacy.

Examples of data sources that can be integrated with SIRA include: the Dow Jones Watch List, data held by Cifas, intelligence from the Insurance Fraud Bureau, National Fraud Initiative data and criminal intelligence.

A multi-layered approach to financial crime prevention

As businesses grow and new threats emerge it's vital that companies have a multi-layered approach to financial crime prevention and continue to evaluate their defence systems. SIRA fully integrates with Orion - an advanced network visualisation tool and Precision, a sophisticated predictive analytics solution to give businesses a truly integrated approach to financial crime defence.

A truly bespoke system

The SIRA solution can be customised to your exact needs by incorporating a number of different services to satisfy:

ID and verification ensuring you are dealing with the genuine customer by utilising checks against bureau data and mobile, device and email information.

Anti-money laundering and compliance - ensuring regulatory requirements are met by performing all of your statutory checks at both point of application and throughout the customer lifecycle.

Enhanced due diligence enabling you to expand your broker or network reach by ensuring firms you work with are bona-fide, and, via ongoing screening, ensuring that any changes in circumstances are notified to you to manage risks before they manifest.

Why is it important to implement SIRA for Motor Finance right away?

In a highly competitive market, SIRA for Motor Finance will give you an edge by providing your networks and dealers with real time and accurate information which enables them to deliver the right solution to the right customers at the point of sale. Instant and informed information makes the whole process smoother and smarter, enhancing customer satisfaction and sealing sales before your competition can respond.

SIRA gives you and your dealers another significant competitive advantage too, which is demonstrated in a piece recently published by AM Online:

“Increasingly, applications are made online or by phone with no face to face contact. This presents a greater opportunity for the fraudsters...Often fraudsters will make several applications in quick succession to various finance companies. If unsuccessful, they tend to come back wanting to change some of the basic information that is processed as part of the application, such as salary. They might also come back with another person to get the finance in their name. They are often persistent to get the transaction proceeded very quickly.”

If the criminals are identified immediately, they will move on to a more vulnerable provider and system - they won’t give up. With SIRA, you and your dealers are protected from the start.


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