Adopting an innovative approach to technology can help asset finance providers deliver better customer experiences.
In a previous post, we talked about opportunities on the horizon for asset finance providers to tap into a post-pandemic entrepreneurial spirit. We focused on the influence of young businesspeople, from Millennials to Generation Alpha, yet people of all ages want to work for themselves, wherever and whenever they want. The trick in financial services is being able to provide what people want for new business to flourish. The adoption of technology is important.
Technology comes in many forms, from going paperless to using automation, from being an analogue service provider to going digital. Technology is a catch-all word that covers numerous things, but the biggest influencer of technological progress over the last few years has to be cloud. Once thought of as a whimsy for online storage providers and startups with no capital (I know this because I was writing about it in the mid-2000s), it probably learned to fly when the likes of Salesforce launched its software as a service (SaaS) offering. Since then, cloud has taken off, with models such as platform-as-a-service, infrastructure-as-a-service and SaaS evidence of the success of its appeal.
Yet, while cloud technology was successfully adopted by B2C, adoption has been slower in B2B. The asset finance sector is one such snail. Part of the reason for this is the complexity involved in typical asset finance processes, such as due diligence around secure transactions, as well as oversight of those transactions. It’s a cumbersome, yet necessary due diligence process that, ironically, cloud technology can help with. The concept that heads need to wrap around is the provision of a service model.
Consolidate for frictionless services and functions
For asset finance to offer a service model, and for cloud computing to help with connecting to a network of disparate systems quickly and easily, the concept needs vendor buy-in. As with the process of buying or leasing a new car, various steps in the convoluted process come from different vendors, with the loan, insurance, tax, delivery, signatures and so on taken care of by different organisations. That’s a lot of customer data spread among too many vendors. A consolidated approach would be great for the customer, with all the disparate processes contained in one smooth, seamless transaction. Motor finance companies are wrapping their heads around this, and now is the time for asset finance providers to do the same.
Providing a cloud-powered slick front-end on its own isn’t enough. Integrations need to occur via APIs and a network of technology partnerships, to offer true frictionless services or functions. Let’s look at what the customer could gain from an integrated approach to multiple-vendor processes.
• Technology can help to provide personalised views for customers who only need to see what’s helpful and relevant to them. A service-focused approach to asset finance is the most helpful thing you can offer as a provider. Complicating things by offering everything at the front-end, including banking products people prefer not to see, is messy. The advantage of technology is being able to maintain back-end infrastructure while serving niche audiences.
• There are opportunities to join technology partners and offer embedded services. Customer-centricity is achieved when the customer doesn’t notice how intricate and complex your processes are. It’s a smooth ride. Partnering with fintech providers and embedding their services can help asset finance providers in the long term. Imagine a future where there are no banks, just enablers of financial experience. If you can embed asset finance services, as well as the services of partner vendors, you can easily create tailored user journeys
• The types of services on offer can liberate asset finance providers, taking business in new directions. Imagine a world where long contracts are a thing of the past, with subscription-based models taking their place. Being agile with how digital services are offered, and how leasing and financing works in a modern context, will become crucial to success. Customers want to avoid being held captive by inflexible terms and conditions of multiple vendors. They need to grow their businesses, and cloud-powered multivendor asset finance providers should be the enablers.
Modernise, simplify and enable
I love how there’s an asset finance specialist for opening a coffee shop. It’s tailored, transparent and simple to understand. Above all, it’s customer-centric. This is solving problems for digital communities rather than regional communities. It’s about understanding the demands of a unique sector, then using an integrated approach to enable entrepreneurs to grow their businesses.
Leasing agreements will become more streamlined and manageable, as they can be more accurately tailored to business needs. And with more information comes better decision-making. SMEs in turn will come to rely on technology to form client relationships, control pricing, and learn from broader marketing data.
By becoming more open to technology, the asset finance industry can modernise and serve customers better. People need help in finding ways to start and grow businesses. With a fresh approach to how asset finance providers adopt and work with new technologies, we can enable entrepreneurial spirit to flourish.