Why U.S. Bank wants to sell you a car

U.S. Bank is the latest bank that wants to sell you your next car. The U.S.’s fifth-largest bank by assets has formed a partnership with the startup AutoGravity that lets customers shop for new vehicles and add-ons on the U.S. Bank website, apply for auto financing and get a decision within minutes. The feature is designed to remove the friction from the shopping, buying and loan application process; it even gives qualified customers pre-approval for auto financing to make the decision process at the dealership even easier. “Perhaps in the past, thinking from a bank-centric perspective, we would have created an even easier loan application system where we would say ‘tell us how much you want to borrow and we’ll tell whether or not you can borrow it,’ rather that truly thinking about what the customer really wants — a car,” said Gareth Gaston, head of omnichannel banking at U.S. Bank. The new car buying experience, which is similar to a loan portal the bank has implemented for residential mortgages, is a step for U.S. Bank in realizing its vision of the future of the broader bank-consumer relationship, one in which it can provide various services for a customer’s whole financial experience, without necessarily owning all of it. Banks should always be competent at allocating cash, maintaining capital and managing risk, but their capability could extend beyond product-based financial services. “What banks have to own is customers’ trust,” Simon Paris, deputy CEO of Finastra, recently told Tearsheet. “What they have to sell is anything they feel like.” U.S. Bank's car buying experience is also a way to keep its brand front and center of the shopping experience, rather than waiting in the wings for customers to come to them when they need financing. One of the biggest concerns banks have had with potentially operating as a platform-based banking services provider is what might happen if their brands fall to the “dumb pipes” on which a transactions sit but don’t add any value to customers. “We’re no longer trying to deliver products or features on a website or something, we’re actually thinking through the whole goal or journey the customer’s going to go on,” Gaston added. “Maybe the customer doesn’t want us on every aspect of that journey but we’re making ourselves aware of what the full extent of the journey is and at which points our customers and future customers expect us to be there." The platform will be available on the U.S. Bank mobile app and open up to used-car buyers and co-applicants later this year. U.S. Bank follows JPMorgan Chase, which formed its second auto lending partnership last month which helps customers choose and finance vehicles through auto dealers’ websites. In 2016 Chase launched Chase Auto Direct, which lets customers shop for and finance their vehicles through Chase. Many auto dealers’ financing units, like Ford Motor Credit, are also forming partnerships with auto financing startups to digitize the loan process.