Balancing compliance with running a smooth business is one of the biggest challenges for car dealerships today. There are stricter rules, like the EU’s 6th Anti-Money Laundering Directive (6AMLD), that car dealerships have to follow. At the same time, they need to keep customers happy and continue growing the business, which is a tough balance to strike.
If they can manage both sides well, they can stay competitive, avoid fines, and keep customers’ trust. For example, companies that use automated compliance systems have cut onboarding times by 40%, leading to happier customers and greater loyalty. For finance, compliance, and customer service leaders, it’s all about meeting these rules without slowing down growth.
The Compliance Challenge
In car sales, following compliance rules is not just about obeying laws—it’s also about protecting the business from risks and building trust with customers.
Rules like 6AMLD make it mandatory to know your customers (KYC), check sanctions lists, and find out who really owns a company (UBO transparency). These rules are important because car sales often involve large amounts of money, which can make them a target for money laundering.
The problem is, these rules can clash with making things easy for customers. For example, compliance rules may require customers to provide lots of extra documents during onboarding, which can be slow and frustrating, especially if the process isn’t well organized.
Delays in finishing KYC checks can mean customers have to wait days, which makes them frustrated and may lead to losing sales. The same is true for managing documents by hand—this can lead to mistakes and missed opportunities.
Using Automation to Solve the Problem
To solve these challenges, automation is key—it ensures compliance while also making your business more efficient and valuable.
Here’s how using automation best practices can help:
1. Data Transparency and Clarity
One of the biggest compliance challenges is keeping customer and partner information organized, easy to access, and up-to-date. Centralizing all customer information, like KYC forms and transaction histories, in one data hub ensures everything is current. This means compliance checks—like verifying ownership or checking sanctions lists—are always accurate. This transparency makes it easier to track contracts, organize relationships, and identify risks without lots of manual work.
2. Process Automation for Compliance and Efficiency
Automation takes the manual work out of compliance. KYC checks can happen in real time, and transaction histories are updated automatically. Automated templates and workflows for onboarding, document creation, and signing mean that every interaction meets compliance rules without slowing things down. For car dealerships, this means quicker onboarding and less admin work.
3. Data Archiving, Retention, and Access Management
Compliance doesn’t end when a car sale is complete. Archiving documents and following retention rules are important to meet regulations like GDPR. Automated data archiving ensures that all documents are stored securely and according to the rules. This kind of automation helps keep the business organized while also staying compliant.
Moving from Vehicle-Centric to Customer-Centric Records
Traditionally, car dealerships have kept records focused on the vehicle—tracking the service history, ownership, and other details of each car. But it’s better to focus on customer records instead.
By focusing on the customer, businesses can build stronger relationships and make compliance more personalized. For example, pre-filled forms based on previous interactions make the process smoother and show customers you care about their time, which boosts loyalty.
This customer-first approach also helps sales and marketing, allowing for more personalized engagement and better targeting, which can lead to more growth.
With this shift, every interaction—whether it’s buying a new car, servicing, or a compliance check—is linked directly to the customer’s profile. This approach gives a better understanding of the customer and makes compliance a part of every step, improving the overall experience.
Compliance as a Growth Enabler
Compliance can also be a strategic tool for long-term business growth.
When car dealerships expand into new markets, automated compliance systems bring consistency and reliability. By reducing the risk of non-compliance in new environments, businesses can grow with more confidence.
At first, compliance might seem like a hurdle, but done right, it can actually help a business grow. Dealerships can reduce risks, improve accuracy, and save time—time that can be spent on customer service and growing the business.
1. Cutting Costs Through Efficiency
Manual processes are slow and costly, especially when audits are involved. Automating data management, document workflows, and compliance checks cuts costs by reducing manual work and minimizing errors.
2. Better Customer Experience
Customers want quick and easy onboarding. Automation means fewer delays and a better experience, which is crucial in a competitive market where customers don’t want to wait.
3. Scalable Compliance for Growth
Compliance needs to grow along with the business. As regulations change—and with the emergence of the EU AML Authority (AMLA)—businesses need systems that adapt easily. Automation ensures compliance can scale without becoming too complex.
Cross-Departmental Collaboration for Effective Compliance Implementation
Successfully automating compliance requires collaboration across different departments—finance, IT, sales, and compliance teams.
Finance teams need to see the long-term savings and investment in automation tools, while IT handles system integration and reliability. Sales and customer service teams play a role in clearly communicating compliance requirements to customers.
Bringing all these teams together ensures that compliance isn’t just the responsibility of the compliance team but a shared business goal that aligns with broader company objectives.
This can be achieved through regular meetings between departments, shared KPI dashboards, and training sessions so everyone knows their role in maintaining compliance.
Practical Steps for Implementing an Automated Compliance Approach
To make this approach work, car dealerships can follow these practical steps to build an effective compliance system:
1. Centralise Customer Data
Create a single data hub for all customer information, including KYC forms, transaction histories, and documents. This ensures that every compliance check uses the most current data, streamlining all customer interactions.
2. Automate Key Compliance Processes
Use automation tools for repetitive tasks like KYC checks, document creation, and signing processes. Automated workflows help meet compliance standards without slowing down business, saving time, and reducing errors.
3. Develop Predefined Templates and Workflows
Set up standard templates with built-in variables and conditional logic for documents and use automated workflows to ensure consistency. This ensures all legal requirements are met without needing manual checks for every interaction.
4. Integrate Compliance into Customer Onboarding
Make compliance checks part of the onboarding process. This can include automating background checks, integrating real-time sanctions screening, and UBO verification during onboarding, while keeping it smooth for the customer.
5. Train Staff on Using Automated Systems
Employees need to be comfortable using new automated systems. Hold regular training sessions so staff understand how to use the tools effectively and see how automation can help them focus on high-value tasks instead of manual data entry.
6. Monitor and Adapt to Changing Regulations
Compliance rules are always changing. Use systems that adapt easily to new regulations. Monitoring tools should track changes and adjust workflows as needed.
7. Audit and Optimize Regularly
Regularly audit compliance processes to find areas for improvement. Automation tools can provide insights into bottlenecks or frequent errors, helping you optimize continuously.
Moving Forward: Combining Compliance and Business Agility
By making compliance part of everyday operations, car dealerships can achieve both short-term success and long-term growth. Streamlined compliance helps avoid penalties and creates a solid foundation for growing into new markets confidently. Compliance becomes something that adds value, not just a cost.
It can also set your business apart by attracting customers who value transparency and trust, giving you a competitive edge.
The goal isn’t to choose between compliance and efficiency—it’s to combine them into a seamless, data-driven approach. Best practices show that compliance and efficiency can work hand in hand, helping businesses thrive in a highly regulated market.
Compliance doesn’t have to stand in the way of growth. With the right tools and practices, it can be the foundation for a more efficient, customer-friendly, and future-proof business.
If you're looking to learn more about practical strategies to enhance compliance while maintaining operational efficiency, start by assessing your current processes and exploring automation options. Identify the areas that face the most compliance challenges and look for tools that could make those processes easier and smoother.
Want to take this conversation further? Reach out to Avokaado to discuss how we can help streamline your compliance needs with our solutions.
