In July Toyota Financial Services soft-launched a new online finance tool, allowing consumers to manage their agreement entirely online. Jonathan Minter spoke with Doug Gillies, managing director and Fiona Mackay, general manager, marketing and digital experience, about the project
Speaking to people in the industry, it’s clear there’s a recognition that consumers are now generally connected to the internet most of the time, and that an increasing number of consumers are less patient than before when sourcing services. It isn’t a secret that people value the convenience of being able to deal with companies in their own time (which might not be during standard working hours) and that different people prefer different means of contact – be it in person at a dealership, over the phone or online.
The industry at large is still trying to understand how best to take advantage of the situation, and there have been a number of products released over recent years, looking to digitise the motor finance offering.
With the release of My Finance, Toyota Financial Services (Toyota FS) has put itself at the forefront of embracing the digital solutions.
Since July, customers who bought their car on finance through Toyota FS, have been able to sign up to My Finance, allowing them to manage their contract online – through either a website accessible on desktops and mobile, or through an app on mobile devices. This includes making online payments, changing personal and bank details, requesting changes to payment dates and even obtaining a settlement figure.
In order to access My Finance, customers also need to sign up to My Toyota, the manufacturer’s ownership management system. Fiona Mackay, general manager, marketing and digital experience at Toyota FS, says My Toyota started off locally in the UK, originally as a way for customers to manage their vehicle ownership, and has since evolved to offer several features.
“Now if you go online, you can send journey planners directly to your car’s navigation system, for example, as well as managing some of the ownership parts of your car – such as booking a service, looking at the service history of the vehicle – and there is also a rewards section,” Mackay explains.
This is a developing project, and Toyota plan to add new elements to My Toyota, such as a vehicle order tracker in the near future.
While this may have improved the ownership experience for Toyota drivers, Doug Gillies, managing director at Toyota FS, says the company also conducted market research and found that, while Toyota FS’s offering was well regulated, it was dealer-centric and product-centric, and not as customer-centric as it could be.
Explaining this, Gillies says: “We were more reliant on having the right products and the right relationships with the dealers, who are the introducers of the business. Moving forward, the customer should be at the heart of everything we do, why we do it, and how we do it.
He notes that a classic example of this was when a customer wanted to speak to Toyota FS. He says: “When the customer wanted to talk to us, it was when we were available, which is nine to 5:30, Monday to Friday, not 24/7.”
Looking outside the industry, to other industries, such as banks and large lending institutions, customers demand 24-hour support, seven days a week. In comparison, in motor finance: “No one has a 24/7 solution for online account management. Some of them say they do, and you can go online, and they’ll have the ability to capture what you’re asking them to do, and then they’ll action it within 24 hours, but that’s not truly online.”
There are a number of reasons why motor finance lenders are behind the curve in this respect, Gillies suggests. One is the fact that most lenders focus on the product and the dealer, as opposed to the customer and, as a result, have been slow to provide a service which the customer wants. Additionally some may have legacy systems which don’t lend themselves to interfacing with mobile, connected app technology. In some cases, it may be that the parent companies are more focussed on delivering a return for the shareholders, rather than investing in the future. “It could be all sorts of reasons,” Say Gillies, adding: “some of which we fell into.”
While Gillies says part of the reason why motor finance companies may have fallen behind is because of a focus on dealers, as opposed to consumers, this doesn’t mean he thinks the two are mutually exclusive and, in fact, he says dealer and consumer interests can be very much aligned.
As an example of this, he looks back around a decade, to when there were worries for consumers about the levels of income derived from finance and insurance. This has led to an increasing level of transparency and accessibility from dealers, which has ended up helping both dealers and consumers in the long run.
Nor does this move to become more customer-focussed mean Toyota FS is going to stop looking at its dealers, and Gillies is insistent the dealer remains a key component in purchasing a Toyota, and will be important in spreading the news about My Finance to Toyota FS customers. He says: “The dealers get what we’re trying to achieve, and the strategy and vision behind it. They are very much brought into it, and when they’re sitting down and have concluded the sales, and are talking about other values and features and benefits of the brand, that will include explaining My Toyota, and encouraging the customer to look into it, and take advantage of it if they see fit.”
While Gillies says the dealers will remain important in the sale of vehicles, over time he sees more business being done online.
He says: “Some customers will want to go online, configure the car, configure the finance, and press the order button. The next thing they’ll want is a phone call from a dealer saying ‘you’ve ordered a car, and it’ll with you in three weeks’ time.’ Then either the dealer will deliver the car or the customer will be able to collect the car. So it’ll be a bit like click and collect.”
Not everyone will want to buy a car through this method, and Gillies adds: “This will happen, probably within the next 18 months or two years. Whether it forms 5%, 10% or 25% of overall business, only time can tell. That will be determined by the customer.”
By that time, Toyota FS will have reached ‘Phase Two’ of its rollout. Currently it is in Phase One, which has followed a soft launch. During Phase One, Toyota FS is taking a more passive role, and hasn’t yet written to all its customers about it. Despite this, uptake is described as slightly ahead of expectations since the June launch. The plan is for 25,000 My Finance users by the end of March next year.
Mackay notes that September will be a big opportunity for Toyota to reach this number, due to the number of registrations expected. “Although we’re not writing to customers, we are, as part of our welcome message to new customers, giving information and the option to manage their account online,” she adds.
Describing Phase One, Gillies says: “This is all about the customer making contact with us, at the time they want to do it, how they want to do it.”
While this may sound simple, the truth was anything but, partly due to the number of systems My Finance has to interact with. The My Finance solution is on the Toyota Motor Europe (TME) platform. It gains access through My Toyota, which is the Toyota Great Britain (TGB) entry in the online capability, and then it talks directly to Toyota FS’s contract management system. Technology provider Intelligent Environments was used to act as a conduit between TGB, TME and TFS. “It was very complex, it took a lot of time, but it was very successful,” says Gillies.
A second challenge highlighted was getting the app on Apple’s App store, which required registering and then getting the product approved.
“An awful lot work went into it, and we’re stuck in the middle,” concludes Gillies.
Since the launch, Toyota FS says it has made some refinements to the enrolment process to make the process easier for consumers, and that it now intends to let the system ‘bed in’ for 12 to 18 months, during which the company has another large IT project it intends to work on.
After that, Phase Two will launch. Explaining this, Gillies says: “Phase Two is where we really start to build a relationship with the customer, and where we’re a little bit more proactive. We’re going to ramp up outbound communication to the consumer.
“That may be building up a dialogue to understand if their circumstances have changed. They may be looking to change their car, and if they are, what type of Toyota or Lexus would best suit their needs, if their needs are changing? We might then stimulate that buy-in process with some loyalty incentives, as in say ‘you’ve been a loyal customer for the last car or two cars. To show our appreciation, here is an inducement to change your car and to use Toyota FS.”
In between the two, Toyota FS plans to launch a new point of sale (POS) system, featuring e-signatures and multi-asset quotations for fleets. The system is still being developed, and Toyota is looking to test it in October with a view to a rollout in May.
If everything goes to plan, then, within two years Toyota FS will have rolled out My Finance, launched a new POS system, and launched a second phase of My Finance.
The rapid rollout is partly because the company realises that the next five years will see quite significant change in the industry, and it wants to remain at the forefront. Gillies admits this will put pressures on IT infrastructure and IT resources, but says company’s need to invest for the future.
A big reason for some of these changes has been changing consumer habits, and he adds: “Our core business is pretty damn successful, but how we interact with customers, and on what platforms, will change over time. I think the business model will change, where there will be some customers who want to do everything online, and won’t want to go into a dealership. We’ve got to adapt to those requirements.
One change the company is looking to make is so that TME, TGB, TFS, and Toyota dealers all have the same view, which isn’t the case at the moment. As an example, Gillies says, “If a customer walks into a dealer and says they changed their address. They think they are talking to Toyota. The dealer will say ok, and change the dealer management system accordingly. But TGB and TFS won’t change the address, because they’re in isolation.”
The plan for the next two to five years, he says, is that this will become one single view, so when a customer talks to one part of Toyota to say, for example, they’ve changed their address, then every part of Toyota will update that information.
Another area Toyota FS is exploring is in the realms of credit scoring, and Gillies says the company has held conversations with fintech companies. To this, he adds that motor finance companies are facing challenges and changes to the way they’ve done business in the past. “Things like scoring customers, understanding customer behaviour online, anticipating if maybe they’re in the market to change their car. These types of things will come to the fore over the next year or so, and we’ll look to buy into some of them.”
Any of these changes will naturally need piloting and, as a multinational organisation, much of it will be done outside the UK, though where it makes sense, pilots will been conducted in the UK.
Regardless, the launch of My Finance marks a big step in the process of digitalising Toyota FS’s finance offerings. It also marks the first step in a number of large-scale IT projects for the company, as it keeps up to speed in a rapidly changing world.