Captive of the future: How technology is redefining captive finance operations - Key insights from AFSA’s webinar

The captive of the future isn’t just a lender. It’s an orchestrator, connecting partners, data, and AI on a secure, composable platform with trust and transparency at the center.”-Faizaan Ghauri, Chief Strategy Officer, NETSOL Technologies, Inc.

Captive finance leaders face a fast-shifting landscape. Digital-first customers, tightening regulations, surging cyber-risks, and the rise of electric and autonomous vehicles are rewriting the rules.

NETSOL sponsored AFSA’s Business Partner Webinar “Captive of the Future: How Technology is Reshaping Captive Finance Operations,” in which an experienced panel of industry leaders shared their vision for how captives can thrive. The discussion brought together: 

• Richard Howard - Board Adviser, NETSOL Technologies; former President & CEO, Daimler Truck Financial USA
• Ian Smith - Board Member, NETSOL Technologies; former CEO, BMW Group Financial Services USA & the Americas
• Faizaan Ghauri - Chief Strategy Officer, NETSOL Technologies, Inc.
• Eva Kellershof - Vice President of Sales, North America & Europe, NETSOL Technologies, Inc. 

Their collective perspective points to one conclusion: the next generation of captives must be technology companies first and financial services providers second. 

Key takeaways

• Omnichannel wins: Make online and in-store identical, transparent pricing, smooth credit, e-contracting.
• AI with oversight: Rebuild processes, then automate; keep humans in the loop where it matters.
• Affordability is equal to flexibility: Add access models and bundles to grow margin without racing to the bottom.
• EVs need new math: Treat EVs as dynamic assets; model battery health and act in real time.
• Platformize the captive: API-first hubs align OEMs, dealers, and captives, and unlock modern UX.
• Think GEO: In a world of AI shoppers, being structured, explainable, and present in assistant flows is a moat. 

With the priorities defined, the right place to start is the customer journey. The next section outlines the digital-first imperative, building one, consistent experience across online and in-store, laying the groundwork for AI, flexible affordability, EV lifecycle management, and an API-first platform to scale. 

The digital-first imperative

Today’s buyers, particularly Millennials and Gen Z, expect to complete the journey online and experience zero friction if they switch to the showroom.

Digital first doesn’t mean everything has to be online; the online and the in-store experience really have to match.”-Eva Kellershof

Consistency and transparency across channels are key. As Eva Kellershof notes, digital-first doesn’t mean “all online”; it means your website and showroom match: same prices and fees, approvals and trade-in values that carry over, the same disclosures, and one shared view of the deal for staff and customers.

Ian Smith recalled BMW’s MINI Anywhere initiative:

When I was with BMW, we launched a program called MINI Anywhere that was really looking at trying to bring the end-to-end process online, in order to do that, you have to standardize terms and make things transparent.”

What a true digital-first captive experience looks like:

• Transparent pricing, fast credit, paper-light contracting
• One journey across online and in-store, same screens, same numbers, same status
• Dealer tools that close deals faster, with fewer logins and less swivel-chair

Once the journey is unified, AI becomes the engine that speeds decisions and removes friction without losing human judgment. 

AI’s moment: from pilots to agentic systems (with humans in the loop)

The panel aligned on AI’s potential, especially when it’s embedded in decisioning, documents, and operations, and the need for human oversight where judgment matters.

AI won’t replace people, it will enable a massive increase in productivity.”-Faizaan Ghauri

Immediate AI applications for a digital-first captive: 

• Instant credit and pricing: faster, fairer decisions that fit digital-first expectations
• Operations automation: reduce cost-to-serve and cycle times across servicing and collections
• Risk and compliance: consistent policy enforcement, explainable outcomes, clear audit trails

But AI needs process design, not bolt-ons. As Richard noted, the goal is to make better business decisions (asset risk, credit risk, pricing), not just cost cuts; Ian added that new tech will force leaner orgs and will attract new entrants who adopt it quickly.

With the decisioning fabric in place, captives can expand access models without sacrificing control of risk or unit economics. 

Beyond ownership: The affordability challenge

With vehicle prices climbing and 84-month financing common, younger and urban customers are looking for on-demand access rather than long-term loans. Captives will need platforms that support loans, leases, subscriptions, short-term rentals, fractional access, and more.

Customers, quite frankly, expect more flexibility. We tried subscriptions a couple of years back, but that doesn’t mean we can close the book. Quite the opposite.”-Eva Kellershof

Flexibility is non-negotiable. As Eva Kellershof stressed, captives should support loans, leases, subscriptions, short-term rentals, and fractional access, with simple switches and bundled insurance, maintenance, and EV charging. Utilization must rise as well by managing assets across multiple lives, redeploying idle units with telematics and real-time pricing, and tracking yield per asset-day to build recurring revenue and stronger residuals.

Flexible access only works if residuals are real; EV data models are now critical to protect value. 

EV lifecycle: risk models must evolve

EVs challenge today’s residual logic. Battery health, software updates, charging ecosystems, and policy swings all reshape value over time. The panel called for real-time asset and portfolio management that uses telematics and dynamic data, backed by operating systems that can ingest and act on it.

The leading organizations will know their costs, better understand their risks, and have the most competitive and compelling offers for customers.”-Richard Howard

Ingesting that data at scale demands an API-first platform with security designed in. 

Platformization and Cybersecurity

Captives sit at the intersection of OEMs and dealers, making them prime targets for cyberattacks. The panel agreed that the captive of the future is, at its core, a secure, API-first platform.

On a scale of 1 to 10, how important is it to create a unified digital hub for captives? I think it’s probably 11-Eva Kellershof

An API-driven architecture allows OEMs, dealers, and captives to deliver seamless journeys, empower dealers with one-stop portals, and support future mobility services, all while enabling robust security and regulatory compliance.

From SEO to GEO: Preparing for the next search revolution

Looking ahead, Ian Smith urged captives to prepare for the shift from Search Engine Optimization (SEO) to Generative Engine Optimization (GEO):

Make sure you understand the difference moving from SEO to GEO. Generated content online will fundamentally change the way customers shop.”-Ian Smith

These shifts roll out in waves, here’s a pragmatic horizon plan to sequence the work.

Three horizons for AI in captives

The webinar concluded with a strategic roadmap for AI adoption in automotive retail and finance. It outlined three horizons: immediate gains in decision-making and automation, mid-term integration with OEM and dealer flows, and long-term transformation through fleet monetization and lifecycle optimization. At every stage, progress depends on secure, governed AI that builds customer trust. 

Conclusion

The “captive of the future” is no longer just a finance company. It is an orchestrator of connected mobility, powered by AI, secured by design, and built on an API-first platform. Those who embrace this transformation will not only survive the next wave of disruption; they will set the standard for the industry’s next decade.

Watch the full AFSA webinar to hear the complete panel discussion and explore how NETSOL is helping captives shape the future of finance.