Big data, mobile technology, fintech and social media — the technology trends shaping equipment leasing and asset finance today — were unheard of in 1992, the year that leasing industry executives John C. Deane, Norm Chapman, John Giddens and Bill Montgomery formed The Alta Group. Few equipment leasing businesses were even using the internet, which was in its infancy.

“In the early days, our consultants provided research, data and information to clients. Today, a lot of that information is readily available online,” says Deane, CEO of the company. “This has changed our emphasis to providing professional knowledge, wisdom and solutions as opposed to simply offering data and information.”

Alta has transformed itself in 24 years from a small management consultancy to a comprehensive consulting and services firm with 60 professionals in the U.S., Canada, Latin America, Europe and Asia Pacific. The firm now has younger executives around the world and women in leadership positions, just as diversification is growing throughout the industry today.

Big data, mobile technology, fintech and social media — the technology trends shaping equipment leasing and asset finance today — were unheard of in 1992, the year that leasing industry executives John C. Deane, Norm Chapman, John Giddens and Bill Montgomery formed The Alta Group. Few equipment leasing businesses were even using the internet, which was in its infancy.

“In the early days, our consultants provided research, data and information to clients. Today, a lot of that information is readily available online,” says Deane, CEO of the company. “This has changed our emphasis to providing professional knowledge, wisdom and solutions as opposed to simply offering data and information.”

Alta has transformed itself in 24 years from a small management consultancy to a comprehensive consulting and services firm with 60 professionals in the U.S., Canada, Latin America, Europe and Asia Pacific. The firm now has younger executives around the world and women in leadership positions, just as diversification is growing throughout the industry today.

Many other changes are a clear reflection of the evolving equipment leasing and financing industry, which has become sophisticated, more transparent and tremendously affected by economic, technological and regulatory disruptions.

Adapting to Stay Competitive

As the industry has matured, leasing and finance organizations have realized they must adopt fresh ways to create value and remain competitive.

These developments have affected the consulting firm’s services, which have expanded into seven distinct yet overlapping business practices, including management consulting, vendor/captive, asset management, mergers and acquisitions, legal, professional development and digital business advisory. Increasingly, Alta’s client engagements have a technology component and complex requirements that call for deep experience in multiple aspects of the financing business. Silos are being replaced by collaborative partnering, with external and online resources called upon as needed.

“Ten years ago you might have had half a dozen companies in the industry making system changes a year. Now you have that many a month. So while we still offer strategic advice and services, almost always, in one way or the other, this is wrapped in with how technology impacts the leasing business,” Deane says.

Digital Business Transformations

In 2013, Alta formally launched technology advisory services for the leasing industry. The services have developed into today’s digital business advisory practice. Consultants provide strategic analysis and recommendations for digital business transformations with the goal of improving client competitiveness. Tactical services are also available when desired by clients.

Managing Director John D. Rizzi, head of digital business advisory in the U.S., notes that leasing organizations face a number of challenges. One is the digital transformation in parts of the business not significantly affected before, such as financial statement analysis. Second, there are many new providers in the marketplace offering innovative technology, so businesses often have difficulty pinpointing their best options.

“We make each client aware of all the software providers and implementers that are a good fit for their needs, in a nonbiased way, since there is no single system that is perfect for all businesses,” Rizzi adds.

The group originally focused exclusively on providing strategic advice, but clients began asking consultants if they could assist with tactical services such as implementations. In conjunction with this, the firm’s regions brought in more professionals with technology experience. Clients in the U.S. and other regions that request tactical assistance also have the option of tapping into the firm’s strategic alliance with Genpact.

A third challenge for leasing companies is heightened pressure on customer-facing systems, created in part by the emergence of fintech companies that have revolutionized online loan services. As a result, traditional processes for handling lease applications and credit are on their way out. Rizzi says: “In the future, information required for a lease application such as tax returns and financial statements will be readily available. Once digitized, a $400,000 equipment lease application that now takes a couple of hours to complete can, with a point and click, go out to multiple lenders and lessors, providing the borrower with more choices.”

Fintech Initiatives

Fintech is a game changer for the industry, not only in terms of client expectations for customer-facing technology, but as sources of competition, business alliances, acquisitions and funding.

“Fintech models are being embraced by some of our clients, affecting their processes and offerings,” notes Managing Director Valerie L. Gerard, who heads the firm’s management consulting and vendor/captive practices. “We are also seeing some banks partner with fintechs to adopt elements of their technology platforms.”

This summer, Alta co-sponsored a roundtable held at the Stanford Graduate School of Business on how technology employed by fintechs is disrupting asset-based finance. The roundtable, attended by several fintechs and leasing organizations, explored topics including the office-to-online shift in buyer behavior and the “sharing economy,” a term for the rising popularity of services that encourage individuals to borrow or rent assets from one another.

Accurate Equipment Valuations

In 2013, the firm merged with Carl C. Chrappa’s Independent Equipment Company, establishing Alta’s asset management practice in response to the growing importance of asset management in the industry. Chrappa is the senior managing director who leads the practice in the U.S.

The firm’s international asset management services also combine the services of Ian Robertson in Europe, who heads global asset management services, Senior Managing Director Juan Neil Dodds in Latin America and other professionals.

Last year, the asset management team introduced a subscription service, ExpertAccess, which provides clients with capabilities including opinion letters for current or future equipment value, fair market value letter verification, industry research and data and verbal opinions for bidding purposes. Additional services offered are Uniform Standards of Professional Appraisal Practice appraisal reports and remarketing.

The goal of ExpertAccess is to equip leasing organizations with a “virtual asset management department” or to expand the capabilities of existing programs, Chrappa explains. The product provides banks, leasing companies and captives with a number of capabilities, including the equipment valuations that are critical to help meet regulatory requirements.

“Just as with consumer loans, regulatory agencies look at the probability of default and loss given default and how you have allocated capital to different lines of business,” Deane says. “There is the need to be transparent in certain risk categories. A company also wants its risk-weighted capital to be as low as it can be. This requires accurate historic and projected data on equipment valuation, which is available to clients through ExpertAccess.”

M&A Technology Assessments

Just as technology capabilities have become critical to equipment leasing and asset finance organizations, technology assessments are playing a role in M&A support services, says Senior Managing Director Bruce Kropschot, who heads M&A services in the U.S. and Canada.

“When representing an acquisition candidate, we can help a seller convince buyers that its systems are up to date. When representing a buyer, we can assess the value of the seller’s technology capabilities and also how their systems will integrate with the parent company’s technology,” he explains.

Kropschot notes that Directors Patricia M. Voorhees and James R. Jackson Jr. have technology backgrounds, which enhance their efforts on M&A engagements. Voorhees has worked with alternate lender technology and helps Alta evaluate the technology capabilities of fintech companies.

Rising Global Demand

Global group leaders report a notable rise in client engagements involving digital business advisory services.

“In Latin America, equipment lessors are using digital solutions for greater efficiency as business processes become more complex and demanding. E-billing and e-accounting are also becoming common practices imposed by legal and regulatory changes in several countries,” says Rafael Castillo-Triana, CEO of Alta’s Latin American Region.

“Lessors are also realizing that it is important to make the right choices when technology shopping. There have been several experiences of companies that acquired software solutions and wasted their money when the solutions did not meet their needs,” he adds.

The firm’s Latin American region uses the technology experience of consultant Roberto Fernandez, the experience of other associates and its global database of software providers to route clients to recommended options.

“Typically, the activities that we perform for lessors involve mapping business processes, performing gap analyses, offering a long list of potential vendors that could provide such ‘gap closing’ solutions, advising clients in the RFP selection process, supporting them in negotiating terms with the appropriate vendor and supporting implementations to make sure that lessors receive the value expected,” Castillo-Triana says.

Richard Ryan also has observed more inquiries from clients asking for support with digital business transformations. He is the partner with Invigors EMEA who often leads Alta technology engagements in Europe, working with Partner Paul Johnson-Ferguson, Senior Partner Chris Boobyer and other colleagues.

“There has been a growth of clients developing digital propositions for which they are engaging Alta to test and qualify in the market. This includes bank-owned and independent lessors seeking to grow their businesses through the vendor and direct channels,” Ryan says.

“Existing leasing programs are incorporating digital propositions such as mobile POS, e-signatures, e-docs and online self-service to drive efficiency, cost reductions and improve customer satisfaction. They are increasingly utilizing direct channels such as the internet to enable customers to manage their contracts as well as deliver new services.”

The firm’s consultants are also assisting service providers with digital propositions that go beyond traditional lease administration platforms to include digital service capabilities, analytics and big data.