Digital business model pays off for Toyota Financial

As the pandemic unfolded, the company launched a private-label digital platform that allows motor vehicle makers to offer financial services to consumers, says TFS CIO Vipin Gupta.

A new digital business that Toyota Financial Services (TFS) launched as the pandemic gripped the U.S. is already paying off. The automotive finserv’s private-label platform enables other motor vehicle manufacturers to offer consumers lending, payment and insurance services, and is part of a digital transformation intended to streamline operations and improve customer service.

In April, Mazda North American Operations signed on as the first tenant for TFS’ private-label service, launching Mazda Financial Services to provide consumer auto loans and leasing, says TFS CIO Vipin Gupta, who built the tech foundation for the service. Gupta says the platform, built from scratch in the cloud and accessible to automotive tenants through APIs, underscores Toyota's broader strategy to offer digital services in addition to making cars.

"It's not just about making cars; it's about enabling any service product that gets people from point A to point B," Gupta says. "That opens up the scope and the possibilities."

TFS' creation of the private-label platform is part of a growing trend in which companies integrate and weave digital services throughout their core operations, says Tom Reichert, who researches digital transformation as the global leader of DigitalBCG at Boston Consulting Group. Ideally, the goal is to blend digital technologies, data and talent to boost cash flow and enterprise value, Reichert says.

And while such transformations are hardly new, Reichert says the COVID-19 outbreak has bumped them to the top of corporate priority lists worldwide. More than 80 percent of 5,000 managers and employees BCG surveyed said that digital was helping them get through the economic slowdown triggered by the pandemic. Reichert adds that more IT leaders have become "very involved" in building digital platforms.

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