New York, April 20, 2023 (GLOBE NEWSWIRE) — Reportlinker.com announces the release of the report “Global Automotive Fintech Market Size, Share & Industry Trends Analysis Report By Channel, By Vehicle Type, By Propulsion Type, By End User, By Regional outlook and forecasts, 2022 – 2028” –
Fintech companies in the automotive industry are streamlining and automating financial processes to simplify the purchase and operation of cars for customers and businesses. These technologies include machine learning, data analytics and blockchain.
Automotive fintech includes equipment for managing and owning vehicles and buying and financing them. For example, smartphone applications allow users to check their vehicle’s health and receive alerts when repairs are due. Other systems enable customers to rent cars for short periods without going to a rental car office. These systems provide on-demand car sharing and rental services.
Most dealers and auto loan finance organizations know that change is needed and that they need to start implementing cutting-edge end-to-end pricing technologies, such as digital loans and purchases. Fortunately, recent developments in cloud and digital technology have made innovations and trends in car financing possible. Auto dealers can now finally monitor every element of their loan program because of the sophisticated end-to-end lending software, which integrates cutting-edge technologies such as machine learning, advanced data analytics and artificial intelligence. The use of such technologies will accelerate market growth.
COVID-19 impact assessment
The variety of products available, and convenience, in 2020–21, pandemic-related responses and containment measures will increase the relevance of these elements. Fintech companies, large technology companies and established financial institutions are quickly adapting to a new business environment. The use of digital payments and modifications in the buying and selling habits of retail consumers and suppliers were two developments that were accelerated by COVID-19 and thus drove the market growth despite the initial limitation to the market growth due to the slowdown in the automotive industry.
Market growth factors
Cooperation between taxi companies and fintech companies
On-demand delivery of transportation services to customers through cars, taxis or driving services is a business for the taxi rental industry. With the development of technology and smartphone applications, the industry has seen remarkable growth, making it easier for customers to plan a trip and track their cars in real time. Taxi companies offer many services, including hourly rentals, point-to-point trips and airport transfers. The collaboration between taxi companies and fintech companies for mutual benefit is expected to drive market growth.
The digitization of the automotive industry
The digitization of supply chains is driven by the ever-increasing desire for industries to be more responsible and sustainable globally. Technologies such as blockchain and smart contracts will be used to further achieve this goal of traceability and transparency. The increasing digitization of the automotive sector provides various growth opportunities for fintech companies in the automotive industry to offer better financial services to consumers and thereby increase market growth.
Market limiting factors
Security and privacy concerns of the fintech firms
One-time passwords and other forms of authentication are used by fintech companies to protect the payment system, but hackers can still gain access to these systems and steal financial and personal data. While cyberattacks are becoming more sophisticated every day, and establishing total security in the digital realm is quite a challenge, financial organizations have always been at risk of data leaks. Nevertheless, hackers often use these third-party programs as an entry point. They allow hackers to impersonate authorized users to gain unauthorized access, compromising data security. Data security risks with the fintech companies are expected to limit the market growth.
End use Outlook
Based on end use, the automotive fintech market is segmented into vehicle payments, online leasing, digital loans and purchases, and online insurance. The online leasing segment gained a significant revenue share in the automotive fintech market in 2021. This is due to the fact that online methods reduce the time it takes to lease a vehicle and the cost of paying personnel to enter data into paper-based records. Also, by removing unnecessary trips back to the office for information or paperwork, these technologies enable rental car companies to monitor cars more efficiently and save costs.
Channel Outlook
On the basis of channel, the automotive fintech market is divided into on demand and subscription. The on-demand segment had the highest revenue share in the automotive fintech market in 2021. The growth is due to the fact that with on-demand services, people only pay for what they use. The user gets a customized solution that enables them to work efficiently. Furthermore, on-demand services guarantee that you can expand the services if necessary. This is easy to do without spending money on new equipment.
Vehicle Type Outlook
By vehicle type, the automotive fintech market is classified into passenger cars and commercial vehicles. The commercial vehicle segment gained a prominent revenue share in the automotive fintech market in 2021. This is due to the rapid development of population and urbanization, growing infrastructure, and expansion in the industrial sector. The industrial sector is increasing in emerging nations, creating opportunities in various industries, including construction, mining and tourism. Due to the increase in commuters as a result of the employment situation, there is a significant demand for public transport.
Propulsion Type Outlook
Based on propulsion type, the automotive fintech market is segmented into ICE and electric. The ICE segment recorded a significant revenue share in the automotive fintech market in 2021. This is due to the fact that an ICE car delivers higher engine power than the average electric vehicle and is often less expensive than an electric or hybrid electric vehicle. Traditionally, oil-derived fuels such as petrol or diesel power a car with an internal combustion engine, and have a minimal refueling time which is the reason for the high preference of these vehicles.
Regional outlook
Regionally, the automotive fintech market is analyzed across North America, Europe, Asia-Pacific and LAMEA. The North America region had the highest revenue share in the automotive fintech market in 2021. This is because the automotive sector has developed remarkably in the region. This is due to the availability of a large number of automotive fintech service providers in the region. There is solid support from the government for the sale of electric cars and financial support for car financing. The growing awareness of environmental conservation further fueling the demand for electric cars and providing more growth opportunities for the automotive fintech market.
The market research report covers the analysis of key stakeholders in the market. Key companies profiled in the report include Kuwy Technology Services Pvt Ltd. (Volkswagen Financial Services AG) (Volkswagen AG), Creditas Soluções Financeiras Ltda., Euroclear SA/NV (Euroclear Holding SA/NV), Grab Holdings Inc, Blinker Inc., The Savings Group, Inc. (Autopay), Cuvva Limited, RouteOne LLC, By Miles and AutoFi, Inc.
Strategies Implemented in Automotive Fintech Market
Dec-2022: Euroclear entered into an agreement to acquire FinTech Goji, a developer of private market technology and services. The acquisition will allow the company to offer its clients a one-stop shop offering across a range of products, including ETFs and private funds and mutual funds and alternative funds.
Aug-2022: Blinker partnered with Flagship Credit Acceptance to leverage Flagship’s resources to gather more shares in auto finance. Through this partnership, the company aimed to deploy its proprietary loan origination solutions with a trusted partner.
Aug-2022: RouteOne partnered with Paays, a Canadian FinTech startup focused on creating digital financial solutions. The company will integrate Paay’s ID Verifier into the RouteOne platform to enable car dealers to combat fraudulent lending activities. The integration enables the digital transfer of customer identity information between retailers, consumers and financial sources through the RouteOne Credit Application System.
Apr-2022: By Miles revealed its By Miles Connect platform, which would allow drivers of connected cars to link their insurance to the company directly from the car. The platform allows the company to take information directly from the vehicles, via the cloud, and utilize information about the distance driven for price insurance.
Feb-2022: Kuwy unveiled Lending-as-a-Service (LaaS) platform for online car sellers. The new platform will enable car manufacturers (OEMs), dealers, aggregator platforms and lenders to offer digital retail to customers. The new Lending-as-a-Service (LaaS) platform focuses on search, which includes the websites of dealers, OEMs, automotive marketplaces and aggregators.
Sep-2021: Creditas announced its partnership with Nubank, a Brazilian fintech bank. to offer its products to Nubank customers in Brazil. The partnership will enable the company to allow Nubank customers to exchange cars or renovate their homes.
Jul-2021: Creditas acquired Minuto Seguros, Brazil’s largest digital insurance brokerage. The acquisition of Minuto will enable the company to offer its customers a digital platform for sales, trading, finance, their car.
Feb-2021: By Miles entered into collaboration with WNS Assistance, providers of end-to-end claims handling solutions. The collaboration is aimed at handling claims using the real-time data of the vehicle for a first-of-its-kind connected car insurance using the real-time data of the vehicle.
Jan-2021: AutoFi expanded its operations by launching a new lending-as-a-service division. The new division will allow the financing and purchase of a car completely online.
Jun-2020: RouteOne partnered with Carzato, an online automotive services provider, to improve the experience for consumers and dealers in North America. The integration of Carzato with RouteOne will help the company to solve current market challenges and support the launch of the Online Retailing Experience that brings great leads from retailers’ digital retail platforms and OEMs.
Oct-2019: RouteOne formed a partnership with LendingTree, Inc., a leading online loan marketplace, to improve the car buying process for both consumers, car dealers and indirect car financing sources.
Jan-2018: AutoFi formed a partnership with JPMorgan Chase, an American multinational financial services company. The partnership will enable the company to offer a digital retail solution to retailers across the country.
Scope of the study
Market segments covered in the report:
By channel
• On demand
• Subscription
By vehicle type
• Passenger car
• Commercial vehicle
By progress type
• ICE
• Electric
By end user
• Digital loans and purchases
• Online leasing
• Online insurance
• Payments in vehicles
By geography
• North America
o the United States
o Canada
o Mexico
o Rest of North America
• Europe
o Germany
o Great Britain
o France
o Russia
o Spain
o Italy
o The rest of Europe
• Asia Pacific
o China
o Japan
o India
o South Korea
o Singapore
o Malaysia
o Rest of Asia Pacific
• LAMEA
o Brazil
o Argentina
o UAE
o Saudi Arabia
o South Africa
o Nigeria
o The rest of LAMEA
Companies profiled
• Kuwy Technology Services Pvt Ltd. (Volkswagen Financial Services AG) (Volkswagen AG)
• Creditas Soluções Financeiras Ltda.
• Euroclear SA/NV (Euroclear Holding SA/NV)
• Grab Holdings Inc
• Blinker Inc.
• The Savings Group, Inc. (Autopay)
• Cuvva Limited
• RouteOne LLC
• With Miles
• AutoFi, Inc.
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