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Chase just entered another auto finance partnership
- A partnership with AutoFi demonstrates Chase’s tacit recognition that banks need to be wherever its customers are, even if it isn’t front and center
- It also reinforces the growing reality that banks don't just compete against other banks; they compete against retailers and any other non-bank provider of financial services

Car buying is still a mainly offline process, but financing cars is experiencing a slow move to digital.
JPMorgan Chase wants to be part of that migration to digital. On Thursday it entered an agreement with AutoFi, a car shopping and financing startup, through which it will deliver auto financing terms online within seconds. AutoFi helps customers choose and finance vehicles through the auto dealers’ websites and complete the sale quickly and easily. Chase is the first national bank on the digital retailing platform.
This is Chase’s second auto financing partnership. In 2016 it partnered with TrueCar, an auto pricing and information website for new and used car buyers and dealers, to launch Chase Auto Direct, which lets customers shop for a vehicle and secure financing on the Chase website or mobile app.
About 47 percent of people are comfortable shopping and financing their cars online, according to research commissioned by the bank.
The AutoFi agreement is different in that it puts the bank on a third party platform interfacing with the customer, demonstrating Chase’s tacit recognition that banks need to be wherever its customers are.
What happens to brand is one of the biggest internal conflicts banks are dealing with as they navigate their identity crisis: while their brand disappears behind retailers, e-commerce experiences and other shopping platforms they still need to maintain enough brand strength to continue owning customers’ trust — which is required of every financial institution no matter how their roles evolve.
It also reinforces the growing reality that banks don't just compete against other banks; they compete against retailers and any other non-bank provider of financial services. Many auto dealers operate entire financing units, such as Toyota Financial Services, Ford Motor Credit, Hyundai Motor Finance or GM Financial. According to research commissioned by Chase, 45 percent of U.S. consumers finance their vehicles through a bank.
Large banks have been pulling back from the auto finance space over the past year, however. About a year ago BB&T, Chase and Wells Fargo reported double digit percent decreases in year-over-year auto originations, in July Wells said it would scale back its auto lending business due to growing stress in the market and in December TCF Financial discontinued all indirect auto originations. Sales of new cars and light trucks fell 2 percent last year to 17.2 million.
Chase’s auto portfolio grew throughout 2017, though it was more stagnant toward the end with just 0.9 percent growth in the third quarter. Banks lost share in the overall market that year; the combined marketshare of JPMorgan Chase, Ally Financial, Wells Fargo, Capital One and Bank of America fell to 25.3 percent from 26.2 percent the year before.
Chase has been one of the most proactive banks in pursuing collaborative agreements with different fintech startups to improve its digital customer offerings. It also works with OnDeck for small business lending, Roostify for mortgage origination, Bill.com business–to-business payments and is part of the Zelle network for consumer mobile payments. In October it made its first major fintech acquisition in WePay, a small business-focused payments company.

