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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Wolters Kluwer Auto Finance Digital Transformation Index shows continued adoption rate growth in second quarter

Strong seasonality trends play out in both auto lending and secondary markets driven by the tax-buying season

The year-over-year rate of digital adoption for contracting and transaction documentation in the U.S. auto market increased by 29% in the second quarter for lenders and retailers, according to analysis by Wolters Kluwer Compliance Solutions from its Q2 Auto Finance Digital Transformation Index.

The increased adoption rate occurred against a backdrop of continued global economic uncertainty and an almost industry-wide ransomware attack that disrupted sales toward the end of the second quarter, as new vehicle sales were relatively flat with an estimated 4.1 million new car and truck sales. The Index tracks the rate at which auto dealers, service providers and lenders are seeing growth in the evolution from paper-based finance back-office processes to digital.

“In having reached the midway point of 2024, we’re reminded of the true strength of digital adoption across an industry that is still operating on legacy philosophies,” said Tim Yalich, Head of Auto Strategy for Wolters Kluwer. “A growing number of automotive businesses and professionals continue to adopt digital strategies for their back-office workflows and documentation. More impressively, despite a ransomware attack that threatened many businesses into a paper-based environment, many saw opportunities to pivot and remain digital, validating the importance of digitizing their entire workflow operations to meet customer needs.”

Continued eContracting growth over the last year

According to Wolters Kluwer data, auto retailers and their lender partners continue to seek opportunities to adopt digitized contracting and documentation workflows to increase back-office efficiency. While the Q2 adoption rate compared to the prior quarter was only slightly up at 3% due to typical seasonal patterns in the auto industry, the four-year trend shows ongoing digital adoption growth of 165% dating back to the second quarter of 2020.

Securitization markets expand YoY growth in digital adoption

Wolters Kluwer’s Q2 Auto Finance Digital Transformation Index also shows that the digitization adoption rate for securitization markets continued to accelerate. The digital auto loan volume in securitization markets decreased 41% on seasonality trends compared with the first quarter of 2024; however, volume was up 39% compared with the same time last year. Over the last four years, the trend in digital adoption for securitization is up 70%.

According to S&P Global, U.S. prime and subprime auto loan ABS saw improved month-over-month performance in March 2024 due to the tax refund season. Furthermore, as of late April, auto asset-backed securitization volume year is 38.3% higher than a year ago, driven largely by an increase in prime issuances. This trend, along with the seasonality of the tax-buying season, are large reasons for the continued growth in digital adoption rates for securitized and secondary markets.

To learn more and to access additional data insights from the Wolters Kluwer Auto Finance Digital Transformation Index, click here.

For more information about Wolters Kluwer, please visit: www.wolterskluwer.com.

About Wolters Kluwer

Wolters Kluwer (EURONEXT: WKL) is a global leader in information, software solutions and services for professionals in healthcare; tax and accounting; financial and corporate compliance; legal and regulatory; corporate performance and ESG. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with technology and services.

Wolters Kluwer reported 2023 annual revenues of €5.6 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 21,400 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.

For more information, visit www.wolterskluwer.com, follow us on LinkedIn, Facebook, YouTube and Instagram.

Contacts

David Feider

Associate Director, External Communications

Financial & Corporate Compliance

Wolters Kluwer

Office +1 612-246-9454

david.feider@wolterskluwer.com

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