SAFCO, a Nordis client since 2019, is a leading non-prime auto finance company serving large dealer groups. Founded in 1990, Southern Auto Finance Company, LLC (SAFCO) is a leader in building a business that caters to first-time buyers who’ve traditionally had a harder time securing lending. SAFCO recently extended its strategy to military service members with its acquisition of the origination technology from Security National Automotive Acceptance Company (SNAAC). SAFCO has pioneered technology and data analytics to improve the customer experience, with an emphasis on convenient, self-service digital options including payments and email and text communications. Founder, CEO and President George B. Fussell Sr. and Senior Vice President of Compliance and Loan Servicing Daniel Baggett discuss their latest initiatives.
- What would surprise people about your company?
Fussell: We really care about our customers and our combined success. We are a well-meaning company that helps people establish their credit. We also consider whether the car is the right car for the customer. We have as many cars on our list that we won’t finance as those we will finance. We won’t finance cars with high depreciation, high breakdown history, and $500 oil changes. We want to do the right thing for the right reason.
We try to keep people in their cars. We are based in the Sunbelt, where there is no mass transit. Cars are essential for getting to work, for getting kids to school.
- How has the pandemic affected your operations?
Fussell: We were initially surprised, but business remained strong. We achieved 80% to 110% of our expected business each month.
Baggett: For our office staff, the restaurants around our office shut down, so we catered in individual box lunches. Plus, we started a daily 1 p.m. wipe-down. Everyone took pride and ownership in maintaining a safe environment. Additional signage and direction indicators helped with traffic flow in both offices. Continual open communication from SAFCO leadership, including Human Resources, kept our staff aware of the ever-changing conditions.
- What changes have you seen in how your customers interact with you?
Fussell: We have two types of customers—dealers and car buyers. For consumers, there was a lot of panic. Many work in hospitality, and people thought they would lose their jobs. In the first month, we had many people ask for deferments, then it eased up. Once government stepped in with the CARES Act, including PPP and additional unemployment benefits, the panic dissipated.
Baggett: We track delinquent customers. We’ve seen over a 2-fold increase in those customers communicating with us. In the beginning, we sent a blanket email to our customer base, giving them information about what they could ask for. Plus, we made calls to them in order to maintain communications.
Fussell: These are friendly calls and people were a lot more cooperative. Some really delinquent people called in and tried to make arrangements. We had a number of people paying something. Some states imposed moratoriums and we self-imposed moratoriums on repossessions.
Baggett: About 80% to 85% of our customers have opted into receiving email. We have each account set up by communications preferences, such as payment alerts and delivery preferences, such as e-statements. We followed our regular collections processes, including calls, texts, and emails. Customers often responded and asked about the availability of options.
We listened to our customers. When people were slow to receive government benefits or assistance, we offered other sources of help. We kept them in their car for that six-month period. Now, we are working on what we can do to get them into a better situation.
- How are you using technology differently now or what plans do you have to use technology differently?
Fussell: We were on a pretty significant plan already. We wanted to reduce the friction: reduce paperwork for dealers, reduce the number of touches for consumers. We’ve been focused on that for about a year and half.
We just created a virtual funding portal so dealers can pre-fund the deal. That had been on the drawing board and once the pandemic hit, we went ahead with it.
With virtual funding, dealers can add documentation proof, such as pay stubs and down payments, to the portal as they collect it. Ideally this happens when the customer is there to buy a car, and then we can approve the loan in one day or the same day. It enables us to verify the information ahead of time. Loans are contingent on verification. It eliminates the wrinkles, such as including the wrong deductible for insurance or if income isn’t calculated accurately.
The push to reduce friction includes Nordis. Our customers can see their statements on the website and manage accounts online. Nordis has been a big part of that enhancement.
We are in the midst of rebuilding our website to make it more intuitive and easier to use. We bill ourselves as a credit builder, so we’ve added information about how FICO scores work and ways to improve your credit score. Most of our customers are young and have little or a negative credit experience. We want them to grow beyond that.
- What are the key initiatives you are focused on right now?
Fussell: Every year or so, we pick a word to represent our strategy and focus. We just chose adaptability.
We are expanding into new markets and still working on reducing friction. Virtual funding is one of our bigger initiatives. We also are continuing our omnichannel approach. The telephone is a useful tool, but we only reach 8% to 9% of our customers that way. Plus, there are calling restrictions. We are working to develop algorithms to understand the best combination of approaches—texts, calls, and so on. A lot of this information about customers can help dealers during the credit process.
Baggett: From a loan servicing perspective, SAFCO is tracking data on assistance provided and future performance. This data is helping us identify new ways to service our customers. This is an exciting time as we may adapt our existing policies and procedures to accommodate current needs for our customers.
- How important are customer experience and digital transformation as strategic priorities?
Fussell: We are a tech company that happens to finance automobiles. Everything is electronic scorecards, cloud, logic rules, and e-contracts now. We have been one of the first lenders in our lending space to accept e-contracts.
If we aren’t a digital company, we won’t be in business. Borrowing money is an absolute digital experience. We validate information electronically. And we are integrated with other systems such as CarFax.
- How do customer communications fit into achieving your strategic goals?
Fussell: Customers don’t want to talk to anyone. They don’t have time to talk on the phone.
Baggett: We support self-help initiatives, which our customers seem to prefer. We have 12 months of statements online, payoffs online, FICO scores and other credit resources online. Our customers can make payments without having to talk to anyone.
- What results have you realized since your partnership with Nordis began?
Baggett: We achieved a big goal of getting more digital communications by using Expresso®. Before Nordis, about 20% to 25% of our communications were electronic. We’re hovering around 50% now. As a result, we’ve seen a drop of 30% to 50% in customer requests for past statements to our call center.
- What’s your favorite Expresso feature?
Baggett: It’s the overall flexibility to make changes and create our own samples and put them into production. We’ve never had this control and agility before Nordis.