us to be more competitive across a broader range of FICO scores, including in used-prime and other near-prime segments. You published results from a survey in March that found roughly three-quarters of middleincome Americans believe a car is key to job opportunities and job security, and that twothirds would sacrifice other budgetary items to access and maintain a vehicle. What does this tell you? Employment status, and the unemployment rate, are key drivers of payment behavior. Over 70% of our customers for auto loans are middle-income. We want to understand how they’re thinking in this unique environment, where there’s high inflation but strong employment. Our mission and vision are focused on helping consumers and businesses prosper, and how consumers are thinking about the future is important for us as we develop products and services for them. The survey also found that 69% of respondents are worried about a recession. Are you preparing for that possible outcome? We’re preparing for more difficult economic conditions in the future, whether that means an actual recession or not. Economists have been predicting a recession in three to six months for over a year, but the economy has been resilient. We’re optimistic, but we’re also being thoughtful about where and how we’re deploying our capital while ensuring we’re comfortable from a liquidity standpoint. Sixty-three percent of Gen Z expects financial prosperity in five years, according to your survey results. What does that mean to you? It’s great to see that statistic, especially so soon after the pandemic, during which the Gen Z population was really negatively impacted. In the United States, our optimism, resilience and adaptability are our greatest strengths. Do you worry Gen Z customers will go to fintechs, Apple or Big Tech — or whichever shiny nickel of the moment — instead of banks? I think about that every day. Technology is rapidly changing customer preferences and behaviors. Gen Z consumers who grew up with technology expect banking to be similar to shopping on Amazon or an experience on Instagram, and the banking industry will need to deliver on that. How do you target the younger market? We want to try and get them early. At the same time, with financial services, people’s needs change, and their financial position gets more complex over time. We need to understand our value proposition, how we connect with that marketplace and how we add value. From a deposit standpoint or a credit card standpoint, getting in early is important. But in the auto business, when somebody needs a car, they’re going to look for a loan that may or may not come from where they typically do business. Same with a mortgage. Technology has made it possible for people to choose where to shop for the products that make the most sense for them. Has the electric-car revolution impacted your auto-lending business? We are doing lending on EVs. The question, more so than EVs, is whether ride-sharing, car-sharing or a subscription type of ownership will evolve. We do a lot of business with Uber and Lyft drivers in the ride-share environment. We also do lending for commercial and fleet. So we are being vigilant and prepared as the industry evolves. The dealer experience is really important and continues to evolve, too. Through the digitalization of that experience, we can improve outcomes for dealers and customers. We’ve partnered with a firm called AutoFi to set up a portal where a customer can apply for a loan, we can get them credit approval and the dealer can tell them which cars they’re qualified for and what their monthly payments would be. 14 | INDEPENDENT REPORT
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