Buying a vehicle is one of the few major financial decisions that can still carry a real sense of occasion. Customers may spend weeks comparing models, visiting dealerships
and working out what suits their needs and budget. By the time they apply for finance, they are often ready to move.
The experience of arranging finance has a direct bearing on whether that momentum continues. Lenders need to gather and assess sufficient information, verify the applicant’s identity and manage the risk of fraud. Customers increasingly expect those requirements to sit within a digital journey that is clear, responsive and easy to navigate.
These competing demands were at the centre of a recent Driva event, where I joined Matt, Driva’s Head of Credit, for a fireside discussion about the lending experience. We explored why customers may still be asked to provide payslips or bank statements, how open banking and emerging data sources could strengthen the information available to lenders and what those developments could mean for the customer journey.
The discussion raised a broader question that closely reflects the conversations I am having across the auto finance industry: how can lenders use emerging data sources and more strategic approaches to decisioning design to push the boundaries of the digital customer experience?
The ambition is moving beyond digitising individual stages of the application in isolation towards creating a journey that can respond to the circumstances of each customer.
Emerging data sources can simplify how customers provide financial information
Our discussion about payslips and bank statements highlighted how closely the customer experience is connected to the way financial evidence is obtained.
When relevant employment or income information cannot be established through available sources, lenders may need customers to supply supporting documentation. Open banking offers another option by allowing customers to authorise relevant bank-held information to be shared securely.
Until recently, the accreditation and compliance requirements associated with accessing Consumer Data Right (CDR) information could make adoption challenging for some organisations. New options are starting to give organisations access to selected CDR-derived insights without requiring them to obtain their own accreditation.
Lenders working with Experian, for example, can access certain insights through Experian’s accredited environment. Depending on the service, intended use and the lender’s requirements, these can include bank account information and summarised income and expenditure information across relevant categories.
For customers, this can provide a more direct way to share financial information held by their bank. For lenders, it creates an additional source of evidence that may support uses such as bank account verification and financial assessment, subject to the lender’s policies, obligations and the requirements of each application.
The value of these insights also depends on whether income, transfers and recurring commitments can be identified consistently for the assessment they support. Uncertainty in the underlying information can create additional exceptions and manual review. Experian’s work with transaction data indicates that robust interpretation is important if permissioned financial information is to simplify the journey rather than introduce complexity elsewhere.
Rising fraud risk does not have to mean more friction for every customer
Our discussion at the event focused largely on how lenders could use a broader range of information to improve the application experience. A related consideration, and one that regularly arises in my conversations with auto finance lenders, is how to maintain confidence in the identity, information and documentation being assessed.
Generative AI is raising the difficulty of that task. Documents, images and identity materials are becoming easier to create or alter, with implications for both fraud prevention and credit assessment. A manipulated payslip or bank statement, for example, could distort the lender’s understanding of an applicant’s financial circumstances. Experian’s Fraud in the Age of AI research found that 61% of surveyed fraud decision-makers identified AI-generated fraud as the greatest future threat.
The customer experience challenge is to strengthen these controls without making additional verification standard for every applicant. Consumers expect organisations to protect their identities, but they are also sensitive to verification processes that feel excessive: 90% of surveyed Australian and New Zealand consumers were concerned about online identity theft, while 52% had abandoned an online sign-up or verification process because it felt too intrusive.
Adaptive journey design gives lenders a more targeted approach. Where identity can be established through appropriate trusted information and the application does not require closer examination, the customer may be able to continue without a more involved verification process. Where further assurance is required, the journey can introduce the most relevant next step – such as consulting another trusted identity source, requesting document and biometric verification or assessing the integrity of supporting documentation.
The outcome of each assessment should inform what happens next: whether the application progresses, requires clarification or moves to specialist review. This allows lenders to respond to changing fraud threats while keeping the experience straightforward for customers whose applications do not require further verification.
Adaptive decisioning can give each application a proportionate way forward
Emerging data sources and verification capabilities create more options for how an application can progress. Their customer experience value depends on the lender’s ability to bring the results together and use them to determine the most appropriate next step.
When data sources and verification capabilities remain disconnected, the anticipated customer experience gains can fall short of expectations. Applicants may still move through a fixed sequence of requests and checks, regardless of what has already been established or the level of assurance required.
Consider three customers applying for vehicle finance.
The first customer provides the required information, their identity is established through trusted sources and the application meets the lender’s relevant credit and fraud requirements. Behind the scenes, the lender’s decisioning process could bring those results together and allow the application to progress through an automated flow. The customer may complete the journey without being asked to undertake additional verification.
The second customer’s application requires further clarification of their income. The journey could offer a consent-based way to share relevant bank-held information. The resulting insights may then be returned to the assessment, helping the lender determine whether the application can proceed or requires further consideration.
The third application presents an identity or fraud concern requiring additional assurance. The decisioning process could direct the customer to an appropriate additional check, such as another trusted identity source, document and biometric verification or closer assessment of supporting documentation. The result may inform whether the application continues, moves to specialist review or is handled in accordance with the lender’s policies.
Agentic AI as the next era of auto finance customer experience
Looking further ahead, agentic AI has the potential to change how customers experience the auto finance process – moving from a static digital application towards a more guided and responsive interaction.
Consider a customer researching a vehicle from home. An AI-enabled experience could guide them through the finance application in plain language, gather the required information and coordinate approved services as the interaction progresses. Instead of navigating separate forms, document requests and verification steps, the customer could experience a smoother conversation that helps them understand what is required and supports them through the journey.
This potential is explored in Experian’s recent perspective on agentic AI in auto finance decisioning. The illustrative journey shows how an AI agent could coordinate information gathering and workflow execution, while the lender’s governed decisioning continues to apply its approved credit strategies, policies and controls.
That division of responsibilities will be important. Agentic AI may provide a more intuitive customer experience, but the lending decision still needs to be explainable, auditable and subject to appropriate oversight. The intelligence of the experience will ultimately depend on the quality of the information, verification and decisioning capabilities the agent is permitted to use.
Keeping customers at the centre of journey design
What came through clearly at the event was an industry looking to push the digital customer experience further. Emerging data sources, proportionate identity and fraud checks and adaptive decisioning are giving auto finance lenders new ways to keep customers moving through the application journey.
From my perspective, there are four key considerations for lenders:
How emerging data sources can serve a clear purpose
Selected CDR-derived insights can give lenders access to relevant financial information with the customer’s permission. These insights can provide great value when they support a defined use case and make the experience simpler for the customer.
How identity and fraud checks can be applied proportionately
AI is increasing the sophistication of identity and document fraud, but every application does not require the same level of verification. Additional checks can be directed towards the circumstances that warrant greater assurance.
How an adaptive mindset can inform customer journey design
Financial, credit, identity and fraud information can inform how each application proceeds. Straightforward applications may progress with minimal interruption, while applications requiring further evidence or assessment can follow a route appropriate to their circumstances.
What agentic AI will require from the foundations beneath it
Agentic AI has the potential to create more guided and responsive customer experiences. Its effectiveness will largely depend on the quality, connectivity and governance of the information, verification services and decisioning capabilities it brings together.
Next steps
The next step for auto finance lenders is to translate these possibilities into deliberate choices about the customer journey – giving each capability a defined role and ensuring it contributes to a clear, well-governed path through the application.
If you are exploring how emerging data sources, identity and fraud capabilities or adaptive decisioning could enhance your auto finance customer experience, contact Experian to discuss your priorities.
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