Choices, Changes & Challenges: What Technology Taught Us in 2020
by Rita Garwood Vol. 48 No. 3 2021
Strenuous circumstances provoke necessary adaptation to ensure survival and success. The COVID-19 pandemic presented unique obstacles for the equipment finance industry, which was an industry already in the midst of change. Leaders from four financial technology companies share how, in 2020, technology became paramount to the path forward.
Joe Franco, CLFP, Senior Sales Executive, FIS Global
The equipment finance industry has shifted over the last few years and will likely continue to evolve. When it comes to technology, what are the requirements today? Will these requirements satisfy changes in customer expectations?
Joe Franco: First and foremost, customer touch points and interactions must be as seamless as the consumer experience that is on-demand at all hours of the day via smartphone apps and easy-to-use websites. No longer is there acceptance that for commercial finance, a waiting period of hours or days to complete a transaction is acceptable; expectations for consumer and commercial are now effectively the same. Those firms that have focused their technology advancements on the customer experience are the ones flourishing. The trend will continue to evolve as emerging tech and the business landscape advance, whether it’s smart contracts or consumption-based models or the internet of things, frictionless transactions are now the standard.
Andrew Ingram: The past year especially has challenged equipment finance companies to think differently, reinforcing the demand for digital channels and self-service.
With economies recovering, combined with sustainability movements, agility is going to be key in allowing equipment finance companies to innovate their offerings. This includes launching new product types, integrating with best-of-breed services, using the rich wealth of available data in a way they haven’t before and scaling immediately using cloud-hosted solutions. Omnichannel capability through robust APIs, combined with business process automation, will provide the foundation to satisfy varying customer demands.
Complementary to the above, user experience is equally important. Giving your employees the best possible experience using modern and integrated tools helps them to help customers faster, reduces training costs and ensures customer-led changes to business models are adopted smoothly.
Peter Minshall: Customers have developed an expectation for a convenient, differentiated experience that blends digital and physical and lets them engage through and move between their preferred channels. They expect our technology to anticipate their needs and deliver solutions that automate and eliminate inconvenience. Traditional processes take too long, are not intuitive or transparent and create work for the lessee or the borrower, leaving the customer with a negative perception of the experience. The technology has to be delivered like an iceberg — with the known requirement solved for — but only being the tip of the iceberg and all the possibility for the future being available under the visible water level. These requirements may be purely functional,
they may be around the need to change, automate or integrate processes with others, or to keep up with adjacent technologies in the client’s ecosystem.
Jeff Van Slyke: Equipment finance companies today have a very diverse set of technology requirements based upon their size and the markets they serve. However, generally speaking, you can boil down the common requirements across four different categories: adoptability, accessibility, usability and interoperability.
Equipment finance companies require agility in their adoption of technology so they can more readily meet the dynamic needs of their operations and customers. Likewise, anytime, anywhere accessibility to an equipment finance company’s technology ecosystem in the cloud is an equally important requirement, particularly given the pandemic and the distributed nature of consumers of technology. Given that users of technology are more distributed with anytime, anywhere accessibility, it is paramount for equipment finance companies to deploy technologies that are easy to use and create an exceptional user experience. Finally, equipment finance companies require interoperability between their technologies so they may more easily access alternative data sources and/or best-of-breed applications, thereby enhancing their overall technology ecosystem to the benefit of their operations and customers.
How has your company’s roadmap changed to address the changing needs of the equipment finance industry?
Franco: As a technology provider, our focus has changed to not only focus on our customers (equipment finance firms) but also their customers. We have done this with preconfigured product options that optimize speed to market as well as low-code business logic tools and [automation] that enables firms to respond quickly to dynamically changing requirements. Examples include consumption-based models that provide seamless usage-based billing and integration with telematics technology to connect the financed asset attributes with the financial contract. This can be used to support a variety of businesses, whether you are invoicing based on cubic meters of steam for manufacturing or mileage/hours. In addition, enhanced capability using artificial intelligence to predict customer defaults are now available both for use with large- to medium-size ticket portfolios. Finally, we are deploying solutions to pay vendors quickly and efficiently by using artificial intelligence and modern payment transaction capabilities.
Ingram: Customer user groups, combined with strong customer and industry engagement, as well as feedback from our people, all contribute to our roadmap refinement and prioritization. Creating a balanced viewpoint allows our customers to benefit from our product innovation, which helps keep them at the forefront of their industry.
A recent example is the introduction of risk-free rates functionality to support the replacement of IBOR. We engaged with our customers through focus groups to design and implement a solution that is now live in production well ahead of the transition period.
Another is the continued expansion of our support for usage-based products, which will be pivotal as the industry looks towards alternative ownership models. In 2020, we established Alfa iQ to bring machine learning expertise to the asset finance industry. We are excited about the collaboration and the value we can bring across a variety of use cases.
Minshall: NETSOL’s premier products, NFS Ascent and NFS Digital, look to elevate equipment finance companies by efficiently managing their multi-tenant operations while driving growth in competitive markets. This is done through delivering core capability in front-office, back-office and digital tools. These tools enable customers, remote users, dealers and brokers to collaborate in the right place and at the right time. Additionally, our next-gen platform, NFS Ascent, can configure business processes and workflows as our customers grow and change and can seamlessly integrate with external systems and data via configuration, not code. We are prototyping technologies such as AI, blockchain and IoT connectivity in both our Ascent and Otoz products. Our project delivery is ever adapting to the market: Despite the pandemic, NETSOL successfully delivered seven projects in seven countries in record times.
Van Slyke: The capabilities in our product roadmap have not changed significantly over the last few years, but the approach to offering the new capabilities certainly has. We have and will continue to place focus on improved process efficiency through powerful workflow configurations that incorporate business rules and data from both the platform and third-party sources. These workflow capabilities will be the engine that drives productivity by flattening the learning curve, improving the accuracy of the data gathered and connecting interdependent business processes to allow for seamless handoffs between the various parties involved in each transaction. In addition, the information gathered and results achieved through consistent processing patterns will provide valuable insights into an equipment finance company’s operations, thereby promoting more informed decision making.
Please provide a brief example of how your company has helped an equipment finance company ascend to the next level.
Franco: A global equipment manufacturer with a captive finance arm came to us with several challenges: multiple systems of record, inability to upgrade disparate legacy systems, data management issues and an inability to integrate with best-of-breed solutions. By employing our managed services capabilities, client resources have been freed up from their day-to-day tasks and able to focus on the strategic work to rebuild the business by modernizing the infrastructure. We are focused on solving the challenges of the core equipment finance firm on a global basis by consolidating both loans and lease products into one platform across country markets, as well as consolidating the entire finance value chain, including wholesale, floorplan, commercial, retail and line of credit business models. All of this configuration, including the low code business logic automation, is owned by our client, a game changer when you consider the cost saving opportunities this represents.
Ingram: An Alfa customer recently enabled a number of heavily automated end-of-term processes using our powerful workflow and business rule functionality. This has, in turn, enabled them to provide a smooth digital experience for their customers. This was implemented incrementally utilizing Alfa’s flexible delivery model, demonstrating the benefit that our customers gain in terms of reduced risks and faster delivery.
All Alfa implementation activities, such as supporting, designing and implementing solutions like the above, are backed by our core values, particularly to “challenge without being challenging.” Our unique perspective helps our customers to view their challenges from another perspective and promotes the design of solutions that are backed by the combined power of Alfa Systems and complementary best-of-breed technologies. This, combined with our desire to create a positive impact, puts us and our customers in a leading position to deliver value.
Minshall: NETSOL recently engaged with the equipment leasing division of a startup bank in the UK. The client needed a quick implementation with industry standard practice, integration and process. However, the client had and still has their own vision of the equipment leasing process. For example, how to manage the broker relationship and systematically empower brokers and how to manage the customer collection process. Through our digital team’s capability and through the workflow and business process configurability of NFS Ascent, we were able to deliver on these requirements. Unsurprisingly, to meet with other commitments, the project had extremely tight timelines. By delivering with our own NFS Ascent for Startup approach to implementation, which trims down some elements of larger projects without compromising on quality and compliance, and with a joint approach of “leaning into problems” instead of walking away from them, the project succeeded in achieving those deadlines.
Van Slyke: Just over two years ago, we were presented with a challenge to deploy a solution so that a startup organization could quickly ramp up their capabilities to take advantage of a significant market opportunity. Throughout the sales process, we worked with the startup organization to define the requirements for a solution in the LTiCloud that would serve as an enabler to capture the market opportunity. Both parties were able to quickly define success from a capability and timing perspective and then got to work. We are pleased to note that the objectives of that project were successfully met and our customer captured the market opportunity in front of them. Likewise, that project became a launching pad for an organization that just 18 months after deployment of the technology solution became one of the Monitor’s Top 25 Independents.
Founder & CEO,
Wingspire Equipment Finance
When Liberty Commercial Finance launched in early 2017, it was founded with a vision of putting the needs of customers, employees and investors first. The idea was to create the type of organization that customers would repeatedly trust with their finance needs, employees would want to stay and grow with, and investors would want to continue to reinvest as the business grew.