Digital Innovation for an Evolving Vendor Finance Ecosystem

by Justin Tabone & Nareen Gurnani May/June 2023
Technology innovation is critical for success in vendor equipment finance today, and it will become even more so in the future. Justin Tabone and Nareen Gurnani discuss how finance is evolving and how the types of solutions that equipment vendors need will require more and more technology.

Justin Tabone ,
SVP, Originations, Vendor Equipment Finance ,

Technology innovation has become an increasingly important factor in the vendor finance equation. As finance models evolve, the digital solutions needed by vendors are those that can demonstrate the greatest impact or net gain — and those that anticipate or quickly identify and eliminate pain points. The scope entails a full understanding of the ecosystem in which vendor finance business takes place today as well as future business models that are already unfolding.

TIAA Bank’s Vendor Equipment Finance (VEF) business prioritizes technology initiatives that resolve inefficiencies affecting stakeholders across the enterprise: from the company’s internal associates to the entire business ecosystem including equipment manufacturers, distributors and their end users acquiring equipment. Customization for individual vendors remains an important capability as well, and the bank’s in-house framework for digitalization supports this.

Technology deployed by the business in recent years has improved point-of-sale processes, documentation, credit and internal operations. These efforts helped to increase the submittal-to-booking conversion rates and, along with strong production across the industrial, healthcare and capital markets segments, contributed to a

Nareen Gurnani, IT Director, Commercial, TIAA Bank

meaningful increase in booked volume.

Vendor equipment finance success will always be driven by the people involved in this industry and the financing they deliver. Companies that use technology creatively and wisely to support their people will have the advantage. This is becoming even more of a competitive differentiator as business requirements, finance models and customer expectations change.

The following outlines the approach TIAA Bank’s VEF business has taken to refine its digitalization roadmap.

Today’s Roadmap

Marriage divides one’s sorrows by half when each partner shares in the burdens, or so the saying goes. In vendor equipment finance relationships, however, the opposite is true: A problem shared is a problem multiplied. When inefficiencies effect internal team members and customers alike (be they vendors, distributors and/or equipment buyers), it drains productivity for all involved and can sour relationships.

Technology initiatives that resolve issues affecting multiple stakeholders across the enterprise are the most needed and deliver the greatest benefits. They should be given the highest priority.

Initiatives that relieved common pain points for TIAA Bank’s VEF team and its partners led to the development of improved digital quoting tools, business-to-business (B2B) application interfaces (APIs), end-to-end automation of Automated Clearing House (ACH) requests and other advances.

The digital quoting tools provide customers looking to acquire equipment with a seamless, efficient experience, from the convenient credit app to expedited turnaround times. These tools, which the company continues to refine, have eased this process for all involved. They replace Excel-based quoting tools and applications submitted by email. The bank’s vendor finance business is also more tightly integrated with vendor sales operations to support their growth.

This example highlights the importance of document transformation in technology strategies. True digital transformation cannot take place without transforming the documents on which this industry is built. TIAA Bank VEF’s team continues to analyze and categorize documents used in the business for this purpose and is evaluating artificial intelligence (AI) and machine learning as a means of automatically indexing documents.

B2B APIs are another solution benefiting stakeholders across the vendor finance enterprise. Developed in collaboration with the vendors involved, TIAA Bank VEF has deployed APIs to streamline transactions with a number of equipment manufacturers and distributors, particularly those in the healthcare sector that have large equipment sales teams and the requisite customer relationship management (CRM) systems in place.

On the vendor side, APIs eliminate the need for logging into portals and manually entering data for credit applications. Vendors can automatically send credit applications through their CRMs to the bank in a system-to-system call, in the format needed, and check for periodic updates. The APIs also reduce burdensome credit processing tasks for the bank’s vendor equipment finance team.

Benefits extend well beyond the credit application cycle as the APIs ease portfolio management throughout the equipment lifecycle. This capability will likely be expanded to additional vendors in the future.

End-to-end automation of ACH requests is another technology advancement that has paid dividends inside and outside the company. By eliminating most of the manual intervention once required for validation and setup, ACH request automation has reduced the manual queue for internal associates by 90%, resulting in speedier service for customers and fewer errors.

In addition to technology innovations benefiting a cross section of the vendor finance ecosystem, it’s also important to look beyond traditional point-of-sale processes to areas of the business including documentation, credit and internal operations. Related improvements underway for TIAA Bank’s VEF team include the streamlining of pre-approved lines of credit.

So far, this article has emphasized solutions that multiply the benefits of technology innovation by helping multiple vendors and internal associates simultaneously. But giving individual vendors the service they need sometimes requires customization.

To that end, TIAA Bank VEF has built a digital framework that enables customized capabilities to be developed and deployed with minimal additional coding. These customized capabilities include unique interfaces that are improving conversion rates for submittals and reducing manual data entry tasks for internal associates at the company.

It’s also important to note that prioritizing technology initiatives that benefit vendor partners and their customers does not mean ignoring the issues that strain internal associates. Technology that automates routine, burdensome tasks for them lightens the workload and frees up associates to devote more time to complex requirements and one-on-one customer support. TIAA Bank VEF, for example, decided to tackle inefficiencies related to the proliferation of portals. The business increased internal efficiency of associates by providing seamless interaction across applications/touchpoints.

The digital framework supporting all these initiatives is not a typical one for vendor equipment finance providers. While similar companies may opt for pre-built solutions, TIAA Bank VEF’s business develops technology solutions in-house with the input of its vendor partners. The goal: to align with a vendors’ sales needs and processes and the ways in which it engage with its own customers.

The company’s digital framework is also based on composable architecture, which includes an ecosystem of microservices that can be mixed and matched relatively quickly to achieve the functionality needed for new features. This enables the business to efficiently scale new technology and customized solutions and work through its pipeline of digital needs as it evolves.

Looking Ahead

Some vendors and their customers will always be more comfortable leaning heavily on their finance provider’s sales team as a resource — while others are eager to embrace technology as it fits into their business models. In either case, vendor equipment finance providers must deploy technology that creates more capacity for their sales teams and internal associates, so they have the time to manage complex transactions and serve individual customers.

Technology innovation is critical for success in vendor equipment finance today. It will become even more so in the future. Finance is evolving, and the types of solutions equipment vendors need requires more and more technology to support it. Managed services, subscription-based programs and fee-for-use consumption models all depend on technology to a much greater extent than traditional leases ever did. These new transactions also involve more parties, and they require capabilities for tracking, billing and paying based on individual usage.

Vendor equipment finance providers will need to keep pace with technology advancements such as AI and machine learning as they deploy innovative digital solutions to support a changing vendor equipment finance ecosystem. TIAA Bank’s Vendor Equipment Finance business continues to evaluate ways to incorporate technology into every new offering and improve the digital solutions already in place to support internal associates, equipment vendors, distributors and their customers.

ABOUT THE AUTHORS: Justin Tabone is the senior vice president of originations for vendor equipment finance and Nareen Gurnani is the IT director, commercial at TIAA Bank. TIAA Bank’s vendor equipment finance business specializes in financing solutions for U.S. businesses originated through a select network of manufacturers, dealers, resellers and distributors, and is supported by private label and co-branded programs.

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