Opportunity and Disruption in Auto Finance

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2 Executing a Compliance Strategy Compliance Blocking and Tackling PwC’s 2016 Automotive Lending and Leasing Survey revealed technology and compliance as the greatest challenges to growth and profitability 35% 30% 25% 20% 15% 10% 5% 0% 33% 21% 17% 17% 8% 4% 0% Technology Compliance Dealer experience Other Operations Customer experience Human capital Source: PwC’s 2016 International Automotive Lending & Leasing Survey, US respondents 8
The Compliance Management System (CMS) is made up of five pillars. Key focus areas for automotive finance institutions include the following in each pillar. How does your CMS fair? Board & Senior Management (BSM) Oversight Responsibilities • BSM are actively involved in the oversight of the CMS and collaborate with CCO to establish “Tone at the Top” • BSM oversight includes a formal charter, regular reporting on emerging risks and trends, education and training on regulatory and compliance expectations, and thorough documentation including meeting minutes Compliance Program Components • Compliance risk assessment covers federal consumer financial laws, includes the measurement of inherent risk and the adequacy of controls to mitigate those risks, and guides monitoring and testing programs • Program documentation, including policies, procedures, and training, are tailored to align to actual practices at the appropriate level of detail for specific roles Consumer Complaints Management • All internal and third party service provider complaints across the enterprise are captured, analyzed, and reported based on consistent standards to identify potential consumer harm and potential weaknesses in the CMS • Root cause analysis and predictive analytics drive enhancements to underlying business processes to prevent future complaints Independent Compliance Audit • Internal audit performs compliance audits based on risk assessment results and includes an audit of the design and operating effectiveness of the CMS • The internal audit function operates independently of management and reports to the Board (or Board Committee), who reviews, approves, and takes action on audit plans and results Service Provider Oversight • A robust end-to-end oversight program is in place for both initial due diligence and ongoing monitoring, including compliance risk assessments and control reviews, as well as fourth party risk assessments • Oversight function is empowered to take corrective action and/or terminate third party relationships due to heightened compliance risks and/or compliance control failures Automating compliance 9
Page 1 and 2: www.pwc.com/consumerfinance Opportu
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Page 5 and 6: The gloomy side of car buying today
Page 7: 1990’s 2000’s 2010’s 2020’s
Page 11 and 12: While implementing an ERM solution,
Page 13 and 14: Segmentation strategies can help pr
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Opportunity and Disruption in Auto Finance

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