afb Application Services develops solution for Retail Finance at the Point of Sale for Ostsächsische Sparkasse Dresden
Together with us, Ostsächsische Sparkasse Dresden has created a new type of solution that gives it a clear market advantage in Retail Finance and generates attractive revenues.
Munich, 12.05.2022 - Ostsächsische Sparkasse Dresden (OSD) is one of Germany's largest savings banks. Together with afb Application Services, an expert in the digitalization of financial processes, OSD has created a new type of solution that gives it a clear market advantage in Retail Finance and generates attractive revenues. Once the successful test phase has been completed, it will also be available to other savings banks as an out-of-the-box solution.
As regional market leaders, savings banks must constantly defend their share of the consumer credit business. In the important "Automotive Finance" segment in particular, captives and other manufacturer-independent sales financiers have been able to position themselves with attractive offers and gain market share. Private and commercial end customers increasingly expect embedded finance for larger purchases, and not just in the automotive asset class. Here, financing is offered in addition to the purchase: transparently from a single source from the customer's own savings bank or bank. Manufacturers and dealers also expect this service from their financial institution.
Embedded finance solution for Ostsächsische Sparkasse Dresden
Ostsächsische Sparkasse Dresden became aware of afb Application Services when it was looking for a solution provider and expert in Retail Finance as part of its planned system renewal. "afb convinced us with its many years of expertise in the financing business, which enables the direct integration of a manufacturer or dealer - B2B2C or B2B2B," explains Sven Roch, Head of Leasing Business and Retail Finance Expert at Ostsächsische Sparkasse Dresden.
In the preliminary phase, afb contributed its consulting expertise as part of the solution outlining and project scoping. The project scope and requirements, both technically and in terms of time, were then worked out together with the customer and the necessary steps up to the go-live were planned. The customer journey, which was to be streamlined and intuitive for everyone involved, was defined as crucial for business success. The aim of the project was also to create a largely automated credit processing and decision-making process, with creditworthiness information being obtained in the background - via the typical credit agencies for the business. In addition, the focus was on creating the greatest possible convenience with minimal data entry in sales: a comprehensible and intuitive structure of the screen masks and the avoidance of media disruptions. Another aspect was compliance with regulatory requirements (including KYC, MaRisk, BAIT, IT security and data protection) and a reduction in operational risks due to the increasing requirements for managing IT and its providers (general contractor approach) as well as the outsourcing of application operation. Seamless integration into the core banking system OSPlus was also a basic requirement. The processes had to be optimized end-to-end for existing and new customers of the savings bank, with a decision that could be communicated to the potential buyer during the consultation based on the specific credit policy of the respective savings bank. Previous solutions were not able to achieve this.
Finally, the modules of the afb Credit Management Solution (afb-CMS) relevant for Retail Finance were used. This is an open, modular overall system with integrated process automation, which will also allow processes to be further optimized and dynamically adapted to individual requirements in the future. The necessary prerequisites for seamless processes between the afb solution and OSPlus were created by using the Open Banking API. This is a new interface technology of Finanz Informatik, core banking provider of the savings banks in Germany and provider of OSPlus.
The solution implemented by afb Application Services has now been in operational use at Ostsächsische Sparkasse Dresden and Sparkasse Pforzheim Calw since March 2021. The end-to-end digital processes have already led to an increase in sales financing business of around ten percent in the first few months, which can be processed with the existing resources. The focus is currently still on the financing business for motor vehicles and photovoltaic systems, but this is to be diversified by connecting further manufacturers and dealers.
The new solution will enable savings banks to intensify their customer relationships and acquire or win back new customers, both from manufacturers and dealers as well as their customers. With this successful pilot project, Ostsächsische Sparkasse Dresden has set a benchmark for other savings banks that also want to expand their sales financing business quickly and efficiently. The tried-and-tested solution is now available to them out-of-the-box.
"Our goal was to create processes without media discontinuity in order to be able to react more quickly to inquiries and process them smoothly," explains Sven Roch, Head of Leasing Business and expert for Retail Finance at Ostsächsische Sparkasse Dresden. "With afb Application Services, we had an experienced expert on board who not only offered us a future-proof system, but also immediately demonstrated the necessary understanding of the specifics of a savings bank during the project."
"There was still room for improvement for savings banks when it came to Retail Finance at the point of sale. We are therefore very pleased that we were able to realize this lighthouse project together with Ostsächsische Sparkasse Dresden. Other savings banks can now also benefit from this", says Philipp Oberleitner, Member of the Board at afb Application Services.
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