BMO to focus on 'relationship underwriting'

Raymond O’Kane has been a banker for nearly four decades. For the past 12 years, he has been involved with BMO Retail Dealer Finance (RDF).

As national director of RDF, he is accountable for the national sales force, strategic development, as well as the execution and deployment of price and programs across Canada. He also manages external relationships from suppliers to OEMs along with the bank’s captive programs.

The always personable O’Kane took time for a one-on-one with Canadian AutoWorld to discuss business, leasing and where BMO RDF is headed for the rest of 2012.

Canadian AutoWorld: Describe BMO RDF’s recent activities in the Canadian market?
Raymond O’Kane: BMO Retail Dealer Finance has had an established presence within the automotive and dealership finance industry for over thirty years. Over the last five years, BMO RDF has gone from 11th in customer satisfaction in 2007, to third in 2011 as measured by J.D. Power & Associates.

This year we have successfully maintained our ranking as the number 1 bank in prime retail credit in Canada. Customer satisfaction has been our focus for a long time, and it’s something we are always working on improving.

To what do you attribute the success?
One way we have tried to enhance our client service is by holding conferences for F&I business managers.

In May 2011, BMO RDF held its first-ever national networking and training web conference with keynote speakers from TeamOne Research and Training.

Over 13 locations were wired in across Canada. After a successful event, we pursued to hosting additional conferences in Niagara Falls, Edmonton and Vancouver in early 2012. These conferences were not only done to inform F&I business managers, they were done to familiarize lenders and sales reps with their respective dealers.
I believe it is important that our representatives get to know our dealers outside the normal work environment, and moreover, put a face to the name of the people they speak with on a daily basis.

All in all, it was done to enrich the partnerships between BMO and their dealerships on a national level. We are always trying to differentiate ourselves from other financial institutions in the market, and this is one of the ways we’ve dared to be different.

What is BMO doing to keep up with captives?
Unlike captives, we have a large and robust financial network. We can take advantage of the funds, lending power and distribution network we have, so that we can provide our clients with the best products and services possible. BMO RDF has increased its market share, and although we haven’t branded ourselves as a captive, we are still seeing our client-base grow.

Market research is another central part of BMO’s strategy. Understanding our consumers’ needs is crucial and we change our practices, pricing, programs and processes according to the information we acquire.

As previously mentioned, we do this through marketing information firms like J.D. Power & Associates and by holding information and networking conferences across Canada. These conferences serve as a key informational tool to BMO RDF’s team, as we can listen to and hone-in on what our dealers want and need most. It gives us an edge, and allows us to understand what is needed from those who know the business the best – F&I managers and dealer principals.

What are your thoughts on banks and leasing programs?
As you know, banks are prohibited from direct leasing by law. However, BMO offers a lease-like product called SmartChoice. The program is similar to a lease in that, at the given option date, the consumer has a choice of either returning the vehicle, keeping the vehicle and repaying the loan in full or make payments until the loan is paid off.

While not a high-volume product, it is mainly provided as an alternative to a lease product so our dealerships have that option if needed.

What would you like to see change in the Canadian finance market?
First and foremost, I would like to see more efficient relationship management among banks and dealerships using innovative mediums of communication. Social media, for example, is always being talked about. Many think it isn’t as good as it sounds, however, I see a lot of potential for it. It is something we have begun to explore as a way to further enrich the relationships we have with our dealers.

With whom does BMO lend? Is there a concentration of any particular brands?
We conduct business with over 3,000 dealerships nationwide. It’s across the board. It really all comes down to the quality of the relationship that each specific dealership has with BMO RDF lenders and sales reps, and has a lot less to do with the brand manufacturer.

Are there any products or programs BMO RDF would like to highlight in 2012?
Relationship underwriting or lending is designed to enrich the partnerships between BMO and the dealerships by adding a familiar face and voice to help unify and facilitate the selling process.

There are often good deals beyond the limitations of credit application that get booked once the F&I manager and their respective relationship underwriter work together on the deal.

Spot deliveries happen seamlessly when you can contact your individual underwriting team to assist, but what helps even more is if you are familiar with your lender and can interact with them more personally. It makes for more efficient business. The better our underwriters understand the store, the better they can help you get more cars out of the lot.

We are also focusing on more regional and local solutions for dealers. The more we can fragment our team into more concentrated regions, the more insightfully BMO lenders, funders and sales reps can serve our dealers.

Regional trends can be a very vital part to elevating customer service, and it’s something we are putting a lot time and resources into developing. Overall, RDF is working on further building their team of relationship development specialists, lenders and funders to serving dealers on a more personal level, and thus creating a more pleasant and efficient business environment for Canadian dealers and BMO.

Any more conferences to come?
As I said earlier, another part of being the bank that defines great customer service is using our resources to give back to the dealer as much as we can.

We plan on holding more information and networking conferences to add value to our dealers’ businesses, because making our clients more successful in the industry, makes us more successful as well.

What do you want Canadian dealers to know about BMO RDF?
There are a lot of different things we are working on to make their lending experience a lot more practical, efficient and simple.


We are working on ways to make BMO more of a one-stop shop for dealerships with respect to our products, and we are looking into innovative industry technologies, as a way to stay ahead, moving forward.

We are developing relationships with dealers in every stage of our business. Whether it is lenders, funders, sales reps, we want our clients to get to know us better, and more importantly, we want to get to know them. We do this to further personalize our services, and make the lending process more efficient. We take our position as the Number 1 bank in retail credit very seriously. With that responsibility we will continue to listen and redefine what a constitutes a great customer (dealer) experience in this industry.