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Digital Finance

Overview

Timeline

December 2022 - February 2023

Role

Lead Product Designer at Upstart Auto Retail

Summary

Digital Finance seeks to improve the automotive financing industry using AI to identify overlooked but creditworthy individuals by considering factors beyond their credit score. This opens up lending opportunities to people who may otherwise be denied a loan based despite having high odds of repaying the loan while providing lower risk loans to lenders and car dealers.

Working closely with my PM and a small tiger team of engineers we researched, created and validated this new web-based product in three months. Our inaugural launch with a Texas-based dealership in mid-February 2023 marked the culmination of our collective efforts. The overwhelmingly positive feedback highlighted the product's intuitive interface and seamless user experience.

Since its introduction, Digital Finance has experienced rapid adoption, now servicing over 70 dealerships and generating over five million dollars in monthly revenue. Digital Finance represents not only a professional achievement but also a reflection of my commitment to driving positive change through technology.

Brief

Our goal is to improve the process of securing financing for car purchases. Currently, negotiating with lenders is time-consuming, and involves a lot of phone calls back and forth between dealers and lenders. Furthermore, current poor rates have caused finance purchases to decline nearly 10% between 2021 - 2023. This poses challenges for dealers and customers alike, often leading buyers to opt for cash purchases, which earn dealers less revenue, or to forgo the purchase if they're not eligible for financing.

Digital Finance addresses these pain points head-on. By providing real-time instant offers from multiple lenders, streamlining negotiations, and empowering finance managers to swiftly tailor pricing factors to secure the best offers for their customers. Gone are the days of prolonged waits for bank responses. Furthermore, digital finance extends opportunities to subprime borrowers by leveraging Upstart's lending AI, which identifies promising customers by looking at data beyond conventional credit scores. Our goal is simple: to make the financing process smoother and more accessible, ultimately enhancing the car buying experience for all involved.

$1.43 tn

Overall automotive loan balances in the USA in 2022

82%

Of new auto sales are to prime and super-prime borrowers

1/3

Of Americans have a credit score that's considered subprime.

Exploring the Problem

When this project began, our prior exposure to automotive lending and ongoing interactions within the industry provided a foundational understanding of the challenges. To deepen our insight, I conducted immersive research; shadowing finance managers and conducting interviews alongside our PM with them and their customers. This firsthand experience, coupled with a competitive study of existing products like DealerTrack and VIN Solutions, revealed key pain points and areas for improvement. By integrating observations, interviews, and analysis, we honed our understanding, allowing us to craft a tailored solution addressing the unique needs of Finance Managers in automotive lending based on the following key findings:

General Research Findings

Due to the high amount of research findings, I have summarised the general findings from all of the research completed by myself and my team to keep things brief. These  core findings represent the overall themes that I followed during this project.

Keep things flexible

Although simplicity usually guides my approach, for this project our research revealed a strong need for flexibility. Our power users, well-versed in the software, frequently require complex overrides and edits due to varying state laws and data inconsistencies. Balancing this need for flexibility with usability is paramount, ensuring interfaces empower users without promoting bad practices.

Separate client and customer experience

As project requirements evolved, we recognized the necessity for sections exclusive to customers and finance managers for data security. While contemplating concurrent instances on separate devices, we deemed this approach flawed. Instead, we devised a single-device flow, ensuring that the transition between client and customer phases allowed for the active user to control the situation.

Simplify for customer

During shadowing sessions with finance managers, we discovered the importance of simplifying information presentation for customers amidst the technical jargon and intricate paperwork often associated with vehicle sales, especially those involving financing. We recognized the need to tailor information differently when presenting to customers, ensuring clarity and ease of comprehension compared to the nuanced terms familiar to finance experts.

Keep things flexible

With years in the automotive industry, I've witnessed dealerships' reluctance to adopt new tech, with many still favoring paper-based processes. In our interviews however, we discovered a keen hunger for digital intervention amongst finance managers specifically. Due to this eager attitude we knew that we could safely push into more digitally creative opportunities.

What We Made

Finance the digital way!

Highlights

Transparency is valued by customers and clients

We enhanced the auto financing process by improving transparency on pricing, vehicle features, and loan details, making key information more easily readable for customers. While this was initially aimed at addressing customer needs, it unexpectedly benefited finance managers as well. For example, when we launched with our pilot store we received overwhelmingly positive feedback, but it was pointed out that it could be hard for the finance managers to understand why they received certain offer details and when those details might change. Working with our backend team I devised a dynamic approach to highlight loan details, tallowing finance managers to better understand and predict changes to the loan details. This resolved 90% of the concerns raised from the pilot, and led to a shift in approach for our team to a “transparency-first” mentality.

Highlight key stress factors

Buying a car is stressful for customers. This is a hard fact that dealers struggle with every day because customers get negative impressions of the business, or back out of deals when they’re stressed. When we were figuring out the best format to present the offers to customers we went through many different informational hierarchies. Ultimately we found that using a pattern that emphasized the information users were most stressed about, and minimized information they considered “noise” provided the right amount of customer education without becoming ovewhelming.

Creating calm

Despite addressing key stressors, a major focus in this product was fostering a calming environment. Informed by customer research and shadowing finance managers, we recognized the overwhelming stress associated with car buying. To simplify the process and ease customer discomfort with complex screens and paperwork, I prioritized whitespace, soft shapes, and gentle colors. While some clients initially preferred information-heavy screens, the overwhelmingly positive user feedback confirms the efficacy of this design choice.

Conclusion & Learnings

In just under three months, our small team pulled off something big: we revamped auto financing for dealerships and finance managers with an AI-powered solution. Now, finance managers don't have to spend ages on the phone with banks or worry if customers qualify. Our tool gives them instant, customizable offers, making their lives easier. Plus, our process is more straightforward, which builds trust with both clients and customers.

This move into a new lending sector has been a game-changer for Upstart, bringing in over $5 million in revenue monthly and attracting loads of new clients. Working on this project was a blast; our tight deadline forced us to really dive into the agile process, constantly tweaking and testing based on customer feedback. Of course too much feedback can be more of a curse than a boon sometimes, so I also learned a lot about standing my ground on certain issues until we had more data to back up changes while prioritising other changes in a longer term roadmap.