Businessmodel of Ally Financial

Customer Segments

Ally Financial provides a range of financial products and services to a broad customer base, which principally comprises customers across the following segments:

• Consumers, providing personal auto finance and leases, business auto finance and lease, and specialty vehicles to general consumers, primarily the customers of its auto dealerships clients;
• Automotive Dealers, providing dealer loans and wholesale inventory financing to various automotive dealerships and sales outlets; and
• Other Commercial Entities, comprising other commercial enterprises to which the Company provides insurance services. Ally Financial’s three operating segments serve a domestic customer base, with operations across Texas, California, Florida, Pennsylvania, Illinois, Georgia, North Carolina, Ohio, New York, and Michigan accounting for more than 50% of the Company’s automotive and mortgage businesses.

Value Propositions

Ally Financial provides value to its customers in the following ways:

• Its technical expertise and experience, with the Company employing highly-trained specialist personnel across its three operating segments, with a team of experienced industry executives;
• Its broad portfolio of products and services, with the Company offering a broad range of financing and insurance options to automotive dealers and their customers across the US;
• Its incentive and rewards programs, with the Company implementing its Ally Dealer Rewards program, which provides various incentives to eligible dealers for selling or using qualifying Ally Financial products and services; and
• Its close relationships with dealer customers, with the Company working closely with its dealer customers, many of which use four or more Ally Financial products, and providing a targeted messaging program that helps dealers communicate readily with their customers. ### Channels

Ally Financial operates a website at www.ally.com, through which it provides information on its various products, services, and activities. The Company also operates an online dealer portal through its website that allows customers to access certain services, tools, and communications functions. The Company’s auto financing and banking arms also offer online services that enable customers to make payments and manage accounts online, as well as through mobile applications on iOS and Android platforms, over the phone and by post.

Ally Financial also serves its customers through its own network of offices, through which the Company’s specialist sales and service personnel operate. This includes principal corporate offices in Detroit, Charlotte, and New York; primary offices for its dealer financial services operations in Detroit and Southfield; and primary offices for its mortgage operations are located in Fort Washington and Charlotte.

Ally Financial’s dealer customers also serve as an affiliate network, through which the Company is able to provide additional products and services to consumers. This includes more than 17,500 dealers in the US, including close to 11,000 dealers outside of the Company’s General Motors Company and Fiat Chrysler Automobiles dealer channels.

Customer Relationships

Ally Financial provides its customers a range of self-service offerings across its banking and auto financing units. The Company’s dealer portal enables dealer customers to access certain services and tools without interacting with members of the Company’s sales and support staff. Ally Financial also provides digital channels to consumers, who are able to manage accounts and make payments autonomously online and via mobile.

Ally Financial’s sales and service teams work closely with its dealer customers, working together to serve general consumers, and with the Company providing tools to support dealer operations. The Company seeks to establish longstanding relationships in this way, with a view to recurring long-term recurring business.

Ally Financial provides a range of ongoing support services to its customers. It offers a suite of online resources, such as FAQs and guides, and provides contact details for its various operating units. Customers are able to contact support staff directly and receive personalised responses to queries and enquiries. Customers are also able to interact directly with the Company through its social media accounts, including with Facebook, Twitter, Google+, and YouTube.

Key Activities

Ally Financial operates as a financial holding company and a banking holding company.

The Company’s operations are organised into three business segments: Automotive Finance operations, including the provision of automotive financing services to consumers and automotive dealers; Insurance operations, which offers both consumer financial and insurance products through its automotive dealer network, as well as commercial insurance products directly to dealers; and Mortgage operations, which includes the management of its held-for-investment mortgage loan portfolio and the execution of bulk purchases of income mortgage loans originated by third parties.

The Company also operates a banking subsidiary, Ally Bank, which provides various internet, telephone, mobile, and mail banking market services.

Key Partners

Ally Financial works in conjunction with numerous businesses and organisations across its multiple business segments. These partners include:

• Supplier and Vendor Partners, comprising suppliers of tools, services and resources, as well as companies to which certain non-technical functions can be outsourced;
• Channel and Distribution Partners, principally comprising the Company’s network of dealer customers, through which the Company serves a large consumer base; and
• Strategic and Alliance Partners, comprising various companies and organisations with which the Company shares resources and collaborates on joint projects. Ally Financial is a preferred lender of General Motors and Chrysler, the dealerships of which serve effectively as affiliates of the Company. The Company has also established an auto financing partnership with Aston Martin and has agreed a deal with Beepi to provide financing for used cars bought online.

Key Resources

Ally Financial’s key resources are its financial resources, its IT and communications infrastructure, its online and mobile platforms, its intellectual properties, its sales and distribution networks, its partnerships, and it personnel.

Ally Financial owns and leases a number of properties across the US, principally corporate and sales offices for its operating segments and divisions. This includes almost 800,000 square metres of office space across Detroit, Charlotte, New York, Southfield, and Fort Washington.

Cost Structure

Ally Financial incurs costs in relation to the maintenance of its IT and communications infrastructure, the development and maintenance of its online and mobile platforms, the implementation of advertising and marketing campaigns, the operation of its sales and distribution networks, the payment of professional and vendor fees, the management of its partnerships, and the retention of its personnel.

In 2015 Ally Financial’s largest expense related to the payment of salaries and benefits to its workforce of employees, which amounted to $963 million. Other operating costs – including occupancy fees, professional services, advertising and marketing, technology and communications, and regulatory and licensing fees – totalled $1.51 billion.

Revenue Streams

Ally Financial generates revenue primarily through the provision of auto financing services, principally in the form finance charges or lease payments and fees paid by customers on the retail contracts and leases. The Company also derives revenue through fees and premiums associated with its insurance, mortgage, and banking services and products.

In 2015 Ally Financial generated total annual net revenue of $4.85 billion, up on the $4.65 billion recorded by the Company in 2014. The majority of the Company’s revenue was attributed to its automotive financing operations, which accounted for $3.66 billion in revenue for the year. Its insurance operations generated $1.09 billion in revenue, with mortgage and other revenue amounting to $212 million.