Fintech in the Global Automotive Industry, Forecast to 2025

Average Fintech Investment Portfolio of Automotive OEMs to Grow 15x to $230 Million by 2025
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Published: 19 Jun 2017

This research service provides a comprehensive overview of the fintech landscape in the automotive industry. It covers the application and use cases of fintech-powered innovation in the following 5 segments: 1. Automotive Leasing & Finance 2. Automotive Insurance 3. Digital Automotive Retailing 4. Digital Payments 5. Automotive Convenience and Experience-centric Services Apart from providing a host of profiles of key market innovators, this research highlights the opportunities that can be mined with the application of digital transactions in the automotive industry. The study showcases the potential areas for automakers and suppliers for investment and for technology companies to focus on to maximize their revenue potential in the automotive industry. As the automotive industry is facing narrowing margins, the need to look to other revenue streams and also keep the customer committed to the brand for their next purchase is paramount. This can be achieved by creating an experience across the lifetime of the customer's ownership. The need for manufacturers to look beyond the initial sale of the vehicle and periodic maintenance revenue, and also focus on creating a personalized in-vehicle experience through allied service partners is critical to the future of the automotive industry. The role of fintech in enabling an industry-wide transition from a transactional to an experience-centric one is important to help the traditional ecosystem embrace digital transformation. The following questions were the founding blocks of this research: • What are fintech companies and what relevance do they have in the automotive industry? • How can the business interest of fintech companies be classified and what are their applications? • What underlying technology powers the business end of fintech to create these new business models and what is the market size of the value created? • What are the key fintech organizations that an automotive company should be aware of? • What recent partnership activities in fintech companies have products/solutions tailored to the automotive industry? Automotive companies are focusing to reduce the technology gap and improve customer experience with new customer touch points through fintech partnerships. Retail spending online is expected to reach over $3 billion by 2025, with several digital feeder systems, including digital lead generation, eCommerce platforms, and 100% online retailing. A mature market of over $1 trillion is yet to be disrupted by digital financing options. Banks and OEMs are looking for partnerships and pilots to get the right offering mix. In the insurance space, digitizing insurance claims processing will help insurers eliminate fraudulent claims while reducing processing time by 80% and lowering settlement overhead cost by 90%. Technology companies such as Google, Whatsapp, and WeChat are expected to lead digitizing on-demand convenience services as OEMs look to ensure that revenue stays within the core automotive ecosystem.

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