Octane is revolutionizing recreational purchases, like powersports vehicles, outdoor power equipment, and RVs, by delivering a seamless, end-to-end digital buying experience. To provide access to financing as fast as possible, fund more loans, and increase efficiency, they needed to instantly verify income for potential customers.
For Octane® (Octane Lending Inc.®), through its in-house lender Roadrunner Financial, Inc.®, striking the right balance between automation and managing risk is a top priority. Automating as much of the lending process as possible while ensuring a thorough evaluation of the customer's ability to repay has helped Octane improve the consumer buying process while gaining market share.
"We pride ourselves on speed and ease—we're a digital lender. Our goal is to ensure we meet our responsible lending standards while getting the information we need as fast as possible with the least friction for our customers."
Duncan Amos VP of Product at Octane
To evaluate a potential customer’s ability to repay, Octane requires stipulations like proof of income for some applicant profiles. However, in their indirect dealer channel, proof of income stipulations was one of Octane's most significant blockers to increasing their approval-to-book ratio.
When shopping at the dealership, customers rarely have easy access to their pay stubs or bank statements. And many are understably unwilling to log in to their bank accounts on a dealer's computer for Octane to verify income. To try and reduce friction, Octane experimented by sending a text message to the applicant, prompting them to log-in to their bank account from the security of their own phone while they were at the dealership. However, it was still a confusing customer experience because they weren't familiar with Octane, since their point of contact was their dealer representative.
In a period of rapid growth—originations increased by 67% in the first half of 2022 alone— Octane needed a strategy to verify income that was not only fast and invisible to the customer and dealer partner, but also reduced the workload for their operations team.
To more quickly obtain income information with less friction, Octane implemented Truework's API as a part of their overall verification waterfall to instantly provide verified income when the customer's application is submitted. As a result, Octane reduced income stipulations by over 50%, a key contributing factor to increasing their approval-to-book ratio.
For loans where income is instantly verified, loan processors no longer need to spend time reviewing and transcribing proof of income documents. Instead, they can process more loans in the same amount of time and focus on more productive tasks.
"We're roughly doubling our originations every year—previously, there was a 1:1 increase in the number of operations staff we'd need to keep up with volume. With Truework, we can continue our rapid growth trajectory without worrying about scaling staffing," said Amos.
To automate as many loan stipulations as possible, Octane's product team has integrated with many partner APIs. Amos noted that Truework has been one of the best partners to work with from both a collaborative and technological perspective.
"I’ve managed over a dozen integrations at Octane, and integrating Truework's API was one of the easiest projects. Working with our counterparts on the Truework team to obtain documentation, get any questions we had answered quickly, and ultimately go live was a great experience."
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