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  • Professor Andrea M. Armani, University of Southern California
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  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Wolters Kluwer Releases Fourth Quarter Data From Its Auto Finance Digital Transformation Index

Year-over-year growth coincides with strong finish to auto sales in 2024

Adoption of digitized contracting and documentation workflows by auto retailers and their lending partners that foster back-office efficiencies saw a noticeable jump, according to analysis by Wolters Kluwer Compliance Solutions from its Q4 Auto Finance Digital Transformation Index. While Q4 adoption compared to Q3 was down slightly (-2%), the year-over-year trend comparing 2024 Q4 with 2023 Q4 was up 32%. Further, the four-year trend continues to show digital adoption growth of 106% dating from Q4 2020.

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.

"The robust adoption of digital documentation processes over the last four years underscores the unwavering commitment of auto lenders and their dealer partners to modernize their operations,” said Matt Babcock, Digital Lending Product Strategy for Wolters Kluwer. “This rise in digital adoption compared to last year not only aligns with the strong finish we observed in auto sales toward the end of 2024 but also reflects the industry's growing recognition of the critical role digital assets play in enhancing efficiency and customer experience. The continued emphasis on converting paper-based documentation to digital formats signals a mature understanding of the long-term benefits of digital transformation in the auto finance sector."

According to industry reports, the U.S. new-car and light-truck market reached 16 million vehicles in 2024, up 2.5% from 15.6 million in 2023, and the highest level since 2019. Fourth-quarter sales jumped 7.1% to finish the year on a strong note.

Digital adoption trends in securitization markets

With the value in the deep subprime sector down noticeably toward the end of the year, the Wolters Kluwer Q4 Index reflected an 18% decrease in the digitization adoption rate for securitization markets compared with Q3. The year-over-year rate of adoption was also down 15%; however, it is also noteworthy that full-year 2023 to full-year 2024 securitization transactions increased 10.4%. Furthermore, over the last four years, digital adoption for securitizations is up 55%, signaling a continued increase in adoptions on a macro level.

U.S. auto loan ABS performance was mixed in the latter part of 2024 according to S&P Global. While annualized losses improved for both prime and subprime sectors month-over-month, prime losses rose significantly year-over-year. Looking ahead, continued economic growth, falling interest rates, and inflation approaching central banks' target levels should support most asset-backed securities, according to Moody’s.

Wolters Kluwer Compliance Solutions is a market leader and trusted provider of risk management and regulatory compliance solutions and services to U.S. banks, credit unions, insurers and securities firms. The business, which sits within Wolters Kluwer’s Financial & Corporate Compliance (FCC) division, helps these financial institutions efficiently manage risk and regulatory compliance obligations, and gain the insights needed to focus on better serving their customers and growing their business.

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

Media Contacts

John Sternal

Merit Mile

954-592-1201

David Feider

Associate Director, External Communications

Financial & Corporate Compliance

Wolters Kluwer

Office +1 612-246-9454

david.feider@wolterskluwer.com

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