Author Archives: BEBdata

Consumer BK on the Rise

The rise in consumer filers seeking bankruptcy protection is expected to continue in 2024.  Various factors, such as the pandemic stimulus reductions, increased interest rates, and historically high levels of household debt.

According to data from the New York Federal Reserve, household debt reached a record high of $17.3 trillion by the end of the third quarter, accompanied by a slight increase in delinquency rates. However, these rates remain below pre-pandemic levels.

In the past two years, both businesses and households have faced tighter financial conditions due to the Federal Reserve’s aggressive interest rate hikes aimed at controlling inflation. Mortgage loan rates surged to their highest levels since the turn of the century.

Nevertheless, borrowing costs and overall financial conditions have eased during the fourth quarter of 2023, following the Fed’s indication that it was concluding its rate-hiking cycle. Additionally, Fed officials have recently signaled their expectation of rate cuts this year.

Banks increasing buffers to prep for higher rate of defaults

Deloitte Center for Financial Services recently published a report on the 2024 Banking & Capital Markets Outlook. They stated that “banks’ strategic choices will be tested as they contend with multiple fundamental challenges to their business models.” 

Retail banks face several challenges in the coming years, including higher funding costs, slower loan growth, declining loyalty, and increasing customer defections. Despite stabilizing deposit flows, containing deposit costs may remain difficult, and new regulations on capital and liquidity requirements will be introduced. Weakened household finances will put further pressure on banks’ loan books, leading to credit tightening.

To address these challenges, retail banks must focus on fortifying customer relationships and increasing their share of wallet. Personalization will play a crucial role in demonstrating the lifetime value of customers. However, banks may struggle to customize products and services due to legacy systems and limited ability to leverage customer data for tailored experiences. Implementing advanced modeling tools that generate predictive insights and offering real-time financial advice can help overcome these limitations. Banks should also explore emerging technologies to enhance risk management, compliance, operations, and customer experiences. For instance, generative AI can expedite credit risk assessments, notify mortgage applicants of missing documents, and boost the productivity of customer-facing teams.

Retail banks currently face a convergence of pressures, including higher funding costs, competition from digital banks, and increasing demand for personalized services. The rise of embedded finance and open banking further reshapes the retail banking landscape. Customers now have more options and find it easier to switch accounts and diversify deposits across various platforms.

While deposit outflows have stabilized after a turbulent first half of 2023, challenges persist. Higher interest rates reduce borrowers’ appetite for new loans and refinancing, leading to slower growth. Delinquency rates for auto, credit card, and consumer loans have increased, prompting banks to prepare for a higher rate of defaults by increasing their loan loss provisions. In 2024, banks may tighten credit further and consider selling subprime auto loans and riskier home equity loans to strengthen their balance sheets.

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2023 Non-Prime Automotive Financing Survey

The 2023 Non-Prime Automotive Financing Survey results showed the positive impact that non-prime auto financing can have on consumers. The data indicated the median three-year increase in FICO score for deep subprime customers was 78 points.

The findings also noted that 21.31% of consumers with auto financing moved from a FICO score of below 550 to a reading above 640.


It has been revealed in the latest edition of the New Reality Check: Paycheck-To-Paycheck research series, conducted by LendingClub Corp. in collaboration with PYMNTS, that a significant number of U.S. consumers continue to live paycheck to paycheck. The research found that 61% of U.S. consumers fell into this category in July, which is consistent with the previous month but 2 percentage points higher than July 2022. The number of individuals struggling to meet bill payments remains at 21%, representing a 2 percentage point increase from last year. Notably, more consumers across all income brackets reported living paycheck to paycheck in July compared to the previous year.


Experian’s State of the Automotive Finance Market Report revealed that average contract terms in the auto industry are continuing to decrease. This trend persists despite rising interest rates, as consumers increasingly opt for shorter-term contracts. The report highlights that this shift towards shorter terms is particularly prominent in new-vehicle financing. In the second quarter of 2023, the 1- to 48-month segment of new-vehicle financing increased to 14.58% from 9.53% in the same period last year.



As AI continues to evolve, we can expect further advancements that will shape the future of auto sales and marketing. It’s an exciting time to be part of the industry, and the journey has just begun. By embracing the power of AI, professionals in this field can drive innovation, forge stronger customer connections, and lead the way in an ever-changing marketplace.


Customer Behavior Forecasting
Indeed, understanding customer behavior has always been crucial in the business world. However, with the advancements in AI, businesses, including those in the auto industry, now have access to powerful tools that take this understanding to new heights. By leveraging vast amounts of data and utilizing sophisticated algorithms, AI enables insightful analysis of customer motivations, desires, and even predicts their future actions.

The ability to forecast customer behavior has proven to be invaluable for dealerships in adapting their sales strategies and products. With AI-driven insights, businesses can stay ahead of consumer trends, ensuring they offer the right products and services that align with customer preferences and expectations.

By integrating AI into their operations, companies can make more informed decisions, optimize their marketing campaigns, and even personalize their customer experiences. The auto industry, in particular, can benefit greatly from these AI-driven insights, as it allows for the development of innovative and responsive strategies that cater to the changing demands and preferences of consumers.

AI’s role in understanding customer behavior is truly transformative, empowering businesses to not only analyze historical data but also anticipate future trends. As technology continues to advance, we can expect AI to play an even more significant role in refining sales strategies and products across various industries, including the auto sector.


With the help of AI, dealerships can analyze customer preferences, behaviors, and online interactions to create messages that truly resonate with each customer’s unique interests and needs. This could involve offering special discounts on a preferred car model or suggesting related accessories that complement their purchase. By using personalized marketing, dealerships are fostering a deeper connection with their customers, resulting in happier buyers and more successful marketing efforts. If you want to learn more about how AI is revolutionizing personalized marketing.



Your dealership probably possesses an abundance of data. If your sales, marketing, service, and F&I departments utilize a Customer Data Platform (CDP), it’s likely that you find yourself immersed in a vast amount of data.

The implementation of predictive analytics has revolutionized sales and marketing strategies. Through analyzing historical data and identifying patterns, AI algorithms are capable of predicting future sales, optimizing inventory levels, and even forecasting which customers and demographics are most likely to purchase a particular vehicle.

This predictive capability empowers dealers and Original Equipment Manufacturers (OEMs) to make well-informed decisions, reduce costs, and customize their approach to cater to specific customer segments.