Captive finance faces an operational pivot
Captive finance companies built on long-standing assumptions about ownership, channel and risk increasingly find themselves out of step with the demands placed upon them in 2025.
Customers no longer walk into showrooms looking for one-size-fits-all ownership. They’re increasingly buying online, with 25% purchasing cars they’ve never physically seen, according to research from AA Cars. They want flexible, personalised finance that mirrors how they manage other aspects of their lives, including on-demand, subscription-based options.
Simultaneously, automotive OEMs are expanding control of the customer experience, and by extension, finance, to drive improved conversion, satisfaction and lifetime value.
It’s not just customers who have moved on; the regulatory landscape is tightening. The UK’s Zero Emission Vehicle (ZEV) mandate is just one example of how compliance is now directly tied to the sales mix and incentive structures. Meanwhile, the Financial Conduct Authority’s review of discretionary commission models has added new legal scrutiny to how finance is sold.
As outlined in Axiologik’s recent Automotive Report, these trends are significantly impacting captive finance companies’ core IT and applications. But this goes beyond IT, and those who fail to evolve risk becoming irrelevant in a value chain moving faster than they are.
Fragmented architecture and outdated operating models
Captive finance has never existed in a vacuum, but now, more than ever, it sits at a crucial intersection between OEM, dealer, customer and regulator. However, most captives today are built on fragmented architecture; the result of legacy platforms patched together over decades. This limits integration with the wider eco-system and traps data in silos, resulting in:
Poor data sharing – Inconsistent pricing or eligibility decisions across touchpoints damage trust and hurt conversion. A lack of shared customer insight also means missed opportunities for upsell, renewal or retention.
Compliance gaps – With increasing regulatory scrutiny, gaps in data provenance or document traceability expose captive finance companies to fines, legal action or reputational damage.
Fragmentation is frustrating for customers and an operational risk for the entire automotive value chain. Without change, captives risk becoming bottlenecks – and further exposed to new competitors.
What does resilient future growth look like for captive finance?
While the automotive industry has embraced digital transformation, alone this is insufficient. The most successful captive finance companies won’t be the ones that introduce automation and artificial intelligence (AI) quickest – it’ll be those that reframe the role entirely. Collaboration is key as captive finance companies shift from providers to partners. This allows them to create further value and share ownership of the customer experience with the OEM and national sales companies (NSCs).
To thrive in this new landscape, captives must adapt to the flexible and changing demands of their customers. They need to power smarter, integrated journeys that enable growth and strengthen brand loyalty.
Crucially, they need to do it at speed, at scale and in sync with the rest of the automotive ecosystem. That means rethinking how they’re structured, how they collaborate and how they use data to unlock entirely new revenue models.
A new approach built on three core principles
NTT DATA laid out a framework of overlapping principles in our recent report: Delivering change in times of disruption.
This guidance is based on real-world strategies already being explored by leading automotive OEMs and captive finance companies. It revolves around three core principles:
1. Devolution: Re-engineer the operating model
This isn’t just about upgrading IT. It’s about empowering teams closest to the customer to experiment, adapt and deliver. Captive finance companies need to shift from hierarchical, risk-averse structures to agile, cross-functional teams with the authority to act. That means changing incentives, breaking down silos and creating feedback loops that reward collaboration and responsiveness.
2. Collaboration: Build an interoperable ecosystem
The future of captive finance depends on connecting modular, scalable platforms within a flexible and responsive enterprise architecture. This integration across OEM, dealer and NSC boundariesdrives collaboration. It means investing in APIs, shared data models and governance structures that support secure, strategic collaboration, and not just internal compliance.
3. Product Mindset: Use data to unlock growth – not just fix processes
With the right data strategy, captive finance companies can enable personalised pricing, develop risk-based subscription models for younger drivers and support new forms of ownership . For example, Gen Z consumers are more open to vehicle subscriptions and less interested in car ownership. This presents a largely untapped audience for many automotive brands.
These innovations only work if the data is accurate, accessible and actionable. That’s why data transformation needs more than dashboards – it needs evidence-backed investment, a clear business case and executive alignment from the start.
A transformational imperative Pressure is coming from every direction: regulators enforcing compliance, customers expecting seamless, flexible experiences and automotive OEMs redefining the sales and service model.
Captive finance companies that evolve now, both structurally and strategically, will gain a competitive advantage in a changing market. This will only strengthen their relevance in a reshaped mobility landscape.
To find out more about how these three principles can improve collaboration between OEMs, NSCs and captive finance, download the report here.