Creativity Transcends Tradition: Equipment Finance’s Future Must be People-First and Customer Obsessed
by By Rita Garwood Vol. 48 No. 3 2021
A group of this year’s Monitor NextGen Leaders share their ideas for improving the equipment finance industry. They believe that by embracing creativity over tradition and coming together to learn from each other’s digital transformation experiences, members of the equipment finance industry can create a customer-obsessed space that attracts the innovative young talent needed for the industry’s next chapter.
Rita Garwood, editor-in-chief, Monitor
Equipment finance isn’t sexy. So how do companies in the industry attract and retain younger talent? The first step suggested by many of Monitor’s 2021 NextGen Leaders is spreading awareness.
Mike Richards, a financial specialist at Philips Medical Capital — and many other NextGen Leaders — were completely unaware that equipment finance existed before they joined the industry.
“I didn’t know that the new solar trashcan that’s on the street, the borough or county is financing that. I didn’t know that when I walk into a hospital and I’m getting a scan, that the scanner is financed through an equipment finance company,” Richards says. “We need to attract young people when they’re thinking about what they want to do,”
During his off-time as a basketball coach, Richards often has conversations with kids about equipment finance. “Their eyes light up, and they say, ‘I never even thought of that,’” he says.
Refik Semsedin, an equipment finance relationship manager at Fifth Third Equipment Finance, agrees. His passion for equipment was palpable during our Zoom interview, as he talked excitedly about the ins and outs of manufacturing potato chips, pens and various equipment types.
“It’s a great sense of pride to know that the financing that we provide helps build America,” Semsedin says, adding that he believes others will share his enthusiasm when they realize “how exciting” the business is. “People don’t realize that there’s over a trillion dollars of this stuff being financed at any given time.”
Jessica Temes, vice president of portfolio risk management at First Financial Equipment Leasing, and Samya Jaber, a quality and controls specialist at TIAA Bank, believe that hiring recent college graduates is a great way to generate long-term interest in the industry.
“Recruiting more young adults, students fresh out of college, would be great because it brings current thinking and current culture,” Jaber says. “Young adults can definitely provide a fresh perspective.”
“You can help them learn, teach them the industry,” Temes says. “And they bring such good ideas; they have such a fresh look at things that it really helps to shape the company.”
Temes and Richards both suggest reaching young talent while they are in college by offering equipment finance curriculum. “The closest thing I had to equipment finance — and I was a business finance major — was my 100-level business class where I used a financial calculator. That was the only thing that I was able to take from college and apply to my world today,” Temes says.
Investing in Employees
In the past, companies invested extensively in their employees through training programs, tuition reimbursement and pension plans. But over the years, many of these programs have gone by the wayside and employees have increased their tendency to seek new employers to advance their careers.
Chelsey Barron, vice president of sales operations at VAR Technology Finance, believes companies today must invest in their staff. “They are what make up this industry,” Barron says. “If we, as leaders, continue pouring into them, listening to their ideas for change and encouraging them to be present, our industry will continue to grow.”
Temes would like to see more companies prioritize the best interests of employees over what may be best for the company. “That is what I envision for any equipment leasing company in the future because I do feel it in the present,” Temes says. “I think we’ve been forced to do that with COVID, but I think it’s been a positive change.”
Semsedin says the biggest challenge in the equipment finance industry is how to get the next generation trained.
“I would love to see all equipment finance companies have a training program for new people coming into the business,” Kathy Havlik, CLFP, vice president and district manager at Key Equipment Finance, who started her career as part of Key’s first class of recruits for its SalesACT training program, says. “As we talk about trying to get people who aren’t familiar with the industry into this business, I think we need to be able to ride a path where we can say, ‘We’ve identified these skill sets in you as a person. We understand you’re not going to know how to do equipment finance day one, but we want to be able to provide you with the knowledge so that you can execute on that.’”
“I remember early on in my career not knowing what resources were available to learn more about the industry,” Barron says. “Awareness is so important for every level of an organization. As a leader at VAR, I am always looking for ways to show others what the equipment finance industry has to offer. The pandemic has brought on more virtual events at budget-friendly costs to allow us to expand participation for those who may not have had the opportunity prior. I hope that when face-to-face events come back, our industry continues to offer a virtual option to allow more inclusion.”
Creating Diverse Teams
Several of this year’s NextGen Leaders also underline the importance of expanding diversity, equity and inclusion.
“Organizations are spending a great deal of time building diverse leadership benches,” Semsedin says. “I think that’s incredibly important. Individuals from all walks of life bring in different perspectives to build overall corporate culture.”
“I see the equipment finance industry continuing to make changes in the right direction for inclusion and diversity,” Barron says. “It takes all of us in the industry to continue to make those strides.”
Richards points out that there is still a lot of work to be done when it comes to inclusion: “I think it’s a matter of rolling up your sleeves, having tough conversations, surrounding yourself with people that don’t look like you, who don’t come from the same background ethnically or socioeconomically,” Richards says. “I think where it begins is breaking bread and understanding what people have struggled through that you don’t even think about.”
Chelsea Wood, CLFP, vice president and funding manager at Wintrust Specialty Finance, believes the optimal equipment finance industry of the future would include “diverse thinking leaders, enhanced technology and resources to stay competitive in the ever-changing market.”
“There are many new competitors, as well as plenty of capital and activity in the market. It’s ultra competitive, so finance companies have to be creative and proactive to compete,” Amy Majeskie, senior vice president and relationship manager with Wells Fargo Distribution Finance, says, noting that today’s equipment finance companies must lead with their value proposition to keep up with the constantly evolving market.
“I need to focus on niches where there’s either less competition or maybe places that are less well understood. How can I bring value to a transaction that’s not just the cost of capital or funds?” Johnny Bebbington, investment analyst at Sentry Financial says, adding that the adoption of new technologies, complex structures and specialization can create meaningful differentiation from competitors.
Thinking outside what has been done and finding new ways to stand out takes creativity. Wood believes the industry is a creative space: “There are progressive leaders trying to meet customers’ needs in new and different ways,” Wood says. “At the same time, there are organizations that are struggling to change and keep up. My view of the industry is that we never stop attempting to find new creative ways to better serve our customers and to continue to help solve their business-related challenges.”
Havlik says equipment finance is often viewed as traditional. “If you’re more formal or pragmatic versus creative, you’re not attracting talent that has that creative nature,” Havlik says, adding that creative people who possess the depth and capacity to excel in equipment finance may be turned off by a traditional work environment with a strict dress code. “I think that we lose a lot of the opportunity to recruit the creatives into our workforce.”
Jaber agrees, pointing out that she and other young talent want to be on the cutting edge and seek out employers who embrace change. She suggests equipment finance companies provide employees with more opportunities to learn about various areas of the business, which will enable them to contribute more to the company.
Moto Tohda, vice president of information systems at Tokyo Century (USA), says equipment finance hasn’t embraced fast-paced change because it wasn’t necessary in the past. “We weren’t really needing to change because we’re in a really niche market with a niche process for customers, so it was more of a tailored process,” Tohda says. “We had a good customer satisfaction, which is a great thing. But now there’s technology that’s available for us that we can use in our process and in our industry to do things better, especially for customer experience. So we should definitely embrace that and move forward.”
“We have to continue to adapt and think creatively and then implement all these creative thoughts with the staff, with the customers and with the industry,” Angelina Frimpong, enterprise data architect at Amur Equipment Finance, says. “Because if you’re able to continue to adopt tech in creative ways to do business, you will be able to thrive on most economic changes.”
To become more creative, Havlik suggests crowd sourcing new ideas and paying attention to what other companies and industries are doing. Havlik also believes that with the shift to digital platforms, data mining holds a great deal of potential to guide the direction of companies and the equipment finance industry overall.
Frimpong says equipment finance is a good place for people in the data field. “Especially now that we have a lot of machine learning, we are able to leverage the historical data we’ve built over time. For my career growth it’s, a good industry because there are so many ways we can look at things with data,” Frimpong says. “There are so many opportunities out there — so many things you can explore — they’re just endless.”
A lack of digital transformation has hindered the equipment finance industry’s success, according to Frimpong. “The industry does most of our stuff in the traditional way, but with the shift to a tech-enabled digital first approach, it has presented extensive opportunities for us to innovate and accelerate our business with technology,” Frimpong says.
“One of our strengths that puts us above and beyond our competition is the utilization of technology that we have augmented with our own internal data systems to provide decisions to customers and fund transactions at a rapid pace without having any significant additional risk to the bank,” Wood says. “Ideally, many of these technological solutions become more commonplace throughout the industry so that the financial options to our customers are broadened as much as they can be.”
Barron believes the optimal future for the industry would include all its current technology-focused needs. “With the hit of the pandemic, I sense many organizations realized the need for growth in technology. I am not just referring to remote work or Microsoft Teams,” Barron says. “How do we connect without meeting face to face? How do we manage the risk of e-signatures and not obtaining signed paper documents? How do we create a platform for subscription-based financing? The equipment finance industry has a wide variety of sectors, but we all have similar needs.”
“Right now, we are all facing this technology transformation, which is a cliché, but it is here, and we all need to take the next step. For some companies, it’s more of a leap than a step and it’s so hard to do it by yourself,” Tohda says, noting that small companies often do not have the resources or budget and large companies are often stuck with old processes, which makes change difficult. “I think it’s best if we get together and talk about the pain points. We can share those ideas, talk openly about it and try to help each other. We’re not going to share our business secret sauce, so no one’s taking away their advantages in their business, but technology-wise, I think we can all collaborate and help support other companies in the industry. I think we should really advocate to have more communication within the industry about technology initiatives.”
Banding together to solve industry-wide technology challenges could ensure the continued vitality of the equipment finance industry itself.
“The equipment finance space is due for a major disruption,” Jillian Munson, technology project manager at QuickFi by Innovation Finance, says. “We have a chance now to re-think everything: our internal and external processes, procedures and operations. We should be asking ourselves, ‘Why do we do it this way?’ And ‘Because that’s the way it’s always been done’ is not a good answer. We should be asking ourselves, ‘How can we streamline this? How can we make this more intuitive? How can we make this simpler?’
“It’s time to re-imagine equipment finance,” Munson says. “With the power of artificial intelligence, machine learning and other technologies, we have the tools we need to advance our industry far into the future. I find it energizing that the future of this industry will be tightly intertwined with innovative tech; we’ll essentially be integrating the two spaces together. The integration of the equipment finance industry with the technology industry will open up so much opportunity for transformation, for our careers and for inevitable exponential growth. And it’s exciting to know that the only way this industry can go is up.”
“Technological advancements that make it easier for customers to do business will differentiate leaders in the equipment finance market,” Majeskie says. “The future will be even more of a consumer-focused model where financial services are immediate, fast and easy. That will be key in driving business through the door.”
“Things are changing fast, and I believe the pandemic has only escalated that change,” Britni Maine, assistant vice president and sales manager for the small business solutions group of the Business Capital Division at CIT, says. “The technology component, combined with a streamlined process, is a must-have for success, especially now. Our vendor partners need this from us to assist them in adapting to that change as well.”
Jaber also advocates embracing digital transformation and automation to enhance the client experience and enable management to react to faster changes. “The ability to increase self-service with the help of technology would be optimal for the future,” Jaber says.
“I think most of the process will be going towards self-service for customers, dealers, manufacturers and even for lenders — for example, the application process or billing process,” Tohda says. “Right now, dealers are working with us and becoming a middleman and do a lot of work, but it will become more self-service.”
Tohda says self-service options will cut down on extensive communication via phone and email: “The communication will be much faster, and it will be easier for a customer to get it done, meaning that those efficiencies will come back to us,” Tohda says.
Frimpong agrees that self-service options will make processes easier. “When you come to Amur, you need financing, but then if we have a self-service where if you need help finding a vendor, we can provide that,” Frimpong says. “If you need help finding a broker, we can provide that. It helps to make the process easier and seamless. It’s one stop for all your activities.”
“We are constantly striving to provide a seamless and easy experience for our vendor partners and customers,” Maine says. “In an optimal finance industry, we would focus on a consultative behavior and act as a guide instead of just a processor.”
“I believe one thing that can make our industry better is becoming more customer obsessed,” Munson says. “For everything we build and for every problem that we attempt to solve, we should be putting ourselves in the customer’s shoes and asking, ‘What does the perfect world scenario look like?’ If I were the customer going through this process, what would I want? What would I not want?’ And we should operate accordingly. Conducting business in this way will instill a sense of trust into the industry, resulting in the customer feeling assured and comfortable that we’re on their side and we have their best interests in mind.”
Wood also suggests creating a more customer centric process: “We are constantly meeting and often exceeding the needs of our customers, creating a user-friendly environment that promotes both their business needs, as well as the likelihood of them coming back to us as they continue to leverage and grow their companies,” Wood says.
“We can always listen to our customers more,” Maine says. “We’re here to be a part of positive change and we should be doing the hard work and figuring out a way, whatever that might be. It’s our job to listen and figure out how to make that happen.”
“An optimal equipment finance industry takes advantage of emerging technology and experiments with it,” Munson says. “Let’s digitize the data and automate manual processes. Let’s utilize AI to improve the accuracy of fraud detection. Let’s implement machine learning to improve the speed of credit analysis. Technology eliminates user errors, it aids organization and reporting, it increases processing speed and it can dramatically improve the customer experience. And those are all variables that determine whether a business or an industry is successful or not.”
Richards believes that satisfying tomorrow’s customers will rely on speed and accessibility. He says the pay-per-use model will become vital to customer satisfaction. “That product is very key because everybody that’s growing up right now has a phone and with a click of a button, they can get what they want, where they want it, as quickly as they want,” Richards says. “We need to make sure our mobile platforms are elite and the best out there in the rankings of apps in the Apple and Android stores because people want to use things and then move on.”
Richards and Bebbington also believe that our industry should be doing more to create a better world. Richards says pay-per-use products are important when it comes to sustainability: “What do we do when these assets are no longer being used? How do we make sure that we’re making the world a better place?” Richards asks.
Bebbington would like to see the industry help provide capital to growing companies with a good social mission.
“There’s a lot of work that we can do on lobbying to encourage our government leaders to provide incentives and subsidies to support the adoption of renewable technology,” Bebbington says. “We’ve seen a shift with the Biden administration in terms of infrastructure and climate change, so I think that’s good. I’d like to see further work in that area, and I think that’s where we have a lot to gain moving forward.”
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