Predictive Analytics Will Make Auto’s Future More Profitable & Efficient

If you haven’t already, take some time to check out the Automotive Intelligence Summit Agenda here!

The Automotive Intelligence Summit focuses on the future of the automotive sphere through eight different lenses we call the AIS Core Topics: Connected Mobility, Fintech Solutions, Transportation Research, Economic Forecasts, Predictive Analytics, Mergers & Acquisitions, Compliance & Regulations and Investment Capital. In today’s blog post, we’re highlighting the topic of Predictive Analytics.

Predictive analytics will smooth over so many pain points throughout the automotive industry. Combining data, statistics, model simulations and artificial intelligence to make predictions about the future, predictive analytics can help foresee changes in vehicle supply, demand, financial markets and other seemingly chaotic systems. With predictive analytics, you aren’t just reacting to changes as they occur; the hope is to anticipate developments in finance or the auto industry and equip yourself with strategies to weather those changes or, even better, profit from them.

Here are a few workshops on the AIS agenda this summer that will address Predictive Analytics…

Wouldn’t you like to know which customers you can convert the second they enter your showroom? Artificial intelligence holds a key to that reality. LotLinx President Eric Brown insists machine-learning AI will open a new era of selling cars, and with his session, “How AI Can Identify Imminent Purchase Intent,” he’ll do his best to convince you of that, too. Artificial intelligence optimizes to the dealer’s marketing and promotional environment against their available inventory. Furthermore, by flipping the paradigm on digital marketing strategies, Brown contends you can more easily pinpoint “needles in the haystack” and sell them the car they want and need. This optimization results in significant increased levels of marketing proficiency, which equals less spend for the dealer and higher returns on capital. Furthermore, with AI, you have little to lose and a lot to gain — Brown suggests a hike in sales velocity by as much as 78% and 80% cost reduction when AI correctly identifies buyer intent.

Along similar lines as Brown, Amy Hughes and Matthew Kolodziej — both of Experian’s dealer intelligence team — contend that knowing the online activities of “high-value users” can help you sell more cars with just a bit of additional tweaking. In their joint presentation, “Unlocking the Mystery: How Sales-Based Attribution Transforms a Dealer’s Bottom Line,” Hughes and Kolodziej will divulge the findings of a study observing how analytics can improve dealership performance, as well as point out which marketing activities most effectively lead directly to more sales.

Consumers are not one-dimensional, and neither are their credit profiles. As such, auto applicants should not be viewed only through traditional credit data but also alternative data. In a nutshell, that represents the crux of Equifax Vice President of Auto Data & Analytics Peter Oburu’s argument in his presentation, “How to Use Alternative Data to Impact Profitability.” Oburu will discuss why alternative credit-data sources, such as phone and cable TV payment histories, are gaining greater acceptance among automotive lenders to improve everyday decision-making, increase profitability by maximizing opportunity in the auto lending market and make better risk assessment and improve decision-making and lending.

Some dealers and lenders may ask themselves, “Can vehicle information help assess the creditworthiness of borrowers? What vehicle types are associated with better credit performance? How economically significant is vehicle information?” If you find yourself wondering about similar issues, you can’t miss Moody’s Analytics Lead Auto Economist Michael Vogan present “How Vehicle Information Informs Credit Risk Measures.” In this session, Vogan will describe how vehicle information, including residual price forecasts, lifts the ability of traditional credit scores to classify borrowers from most likely to default to least likely.

Do you have any questions about predictive analytics? Ask them in the comments below! That’s what we’re about with AIS… For all your questions, all the right answers.

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Why Cybersecurity Should Be An Utmost Priority

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As the world depends evermore heavily upon the Internet and all the devices connected to it, cybersecurity emerges evermore prominently as an imperative in all industries. The automotive and especially financial spheres present no exception. With sophisticated advances in hacking tactics targeting larger marks, auto and financial businesses must have their cybersecurity in check and kept to state-of-the-art standards.

Though it may seem like a more recent development, computers control myriad devices and operations within vehicles and have for decades, from engine timing, emissions systems and cruise control to your seatbelt tensioners and door locks. But connected cars, using Wi-Fi and Bluetooth to interface with your vehicle’s electronic control units (ECUs) and cell networks, present further security concerns requiring due diligence to keep connected systems updated and protected. And while reports of hackers driving cars into ditches may lean towards sensationalism, there remain serious potential issues of privacy, fraud, theft and system failure.

The prospects of autonomous vehicles heighten these concerns even further. Tesla’s Autopilot system has resulted in at least two fatalities — one in Hubei, China; the other in Florida — and most recently, Uber’s rollout of self-driving cabs resulted in the widely publicized death of a pedestrian in Arizona. While these tragedies can be partly (if not largely) blamed on operator error, the fatal accidents do beg many questions: Why didn’t the autonomous driving system correct itself against such hazards? How safe, secure and reliable are these systems? How much real-world testing should they undergo, and how do we regulate and safeguard them?

Auto finance presents similar questions regarding cybersecurity — namely, how do we safeguard and regulate these new systems while they continue to improve our fiscal efficiency?

Data breaches have become headline news especially in the past few years, and companies are becoming more vigilant about their own cybersecurity in the wake of such recent events. Measures like the European Union’s General Data Protection Regulation — known better by its initials, the GDPR — include extensive protections for personal data, and other companies have already taken initiative prior to the GDPR’s impending enforcement later this month. For example, after Equifax suffered their attacks in 2017, they stated at Used Car Week, “We are a different organization, committed to cybersecurity beyond the walls of Equifax,” and declared a commitment to working with government and regulatory bodies to ensure further safety, as well as a change in paradigm from looking at their data as numbers and instead as human beings.

carolina fintech hub cybersecurity cybersec auto intel summit automotive intelligenceAnother big issue in cybersecurity: blockchain. Blockchain definitely promises accountability and transparency in many facets of finance. For instance, blockchain could track not just ownership, but also warranty information and other important financial info. But it requires cohesive, wholesale involvement among all players in the financial business — not to mention their clientele! And such an interconnected concept also requires trust and security between all partners and parties. However, as blockchain evolves from cryptic concept to buzzword to household name, more and more sectors and businesses within them will likely adopt this revolutionary idea.

These are but a few concerns we all have regarding the continuous evolution of cybersecurity. We will all surely learn more about them as the years roll on, but if you’d like to prime yourself and stay ahead of the game, you should join us at the Raleigh Marriott Crabtree Valley for the inaugural Automotive Intelligence Summit. We’ll be hosting a dedicated cybersecurity panel, populated by members of the Carolina Fintech Hub, on Wednesday, July 25 at 2:30 p.m. Levvel Chief Technical Officer Chris Hart; Womble Bond Dickinson, LLP Partner and Fintech Co-Lead Alexandra Villarreal O’Rourke and Bank of America Vice President Rick Scot will sit on the panel, with Carolina Fintech Hub Executive Director Tariq Bokhari moderating.