Some of my earliest personal memories of technology were from television shows from the 1960s. I recall the spaceship and the robot from Lost In Space, and all the space age gadgets of The Jetsons. One of my favorites was the wristwatch communicator of cartoon character Joe Jitsu on Dick Tracy. In early September, Samsung announced the pending release of its Galaxy Gear, “a wearable device to enhance the freedom of mobile communications.” It is a phone, a camera, a watch, a voice recorder and much more — it makes you wonder what marvels will come next.
Advances in our use of technology and our subsequent dependency on these tools have been fascinating to watch. As Monitor celebrates its 40th anniversary I decided to look back to the leasing industry in 1974 to review how far the technology we have come to depend upon has advanced over the past 40 years.
Many of us were not active in the industry in 1974 — but a few folks remember what it was like back then. I polled a group of my LinkedIn connections and asked for their first recollections of technology usage in the leasing and finance business. I received some interesting replies.
My first response came from Joe Nachbin, managing director for The Alta Group. “Your question brings back memories of the Big Blue Present Value books that were a staple of large ticket tax-oriented leases.” Joe continued, “Most transactions were quoted either annually or semi-annually due to all the manual work required to prepare a single quote. No one wanted to quote monthly transactions, as this resulted in six to 12 times the amount of time required for one quote. Each change in assumptions required, in most cases, repeating the entire manual process.”
Early in my career I carried blue books in my briefcase. They were full of rate factors with each page representing different interest rates. I also had an add-on interest rate book that I used to quickly calculate loan payments. In the early 80s I was given a used hp 12c financial calculator with no instructions and was told “Make yourself useful; learn how to use this thing.” I struggled with the reverse polish notation, but eventually I got it by figuring the balances on my mortgage and car loan. Once it was personal and relative, it all began to make sense.
Joe also reminisced about the early use of computers in the business. He wrote, “We moved from the Blue Book to Tab Cards, which were used to indicate the various lease structure alternatives. The cards were then processed on an IBM 7070 or 7090. Turnaround time of 24 hours for complex structures was considered to be fantastic. At that time there were no PCs or even HP-80 Series, which were considered revolutionary.”
Jim Renner, former president and CEO of Wells Fargo Equipment Finance, recalled his use of technology in 1974. “Computers were in their infancy but mainframes were being used for accounting and management information. There were no personal computers, so everything was input into the mainframe.” Thinking back to those days of data input in front of terminals with green screens reminds me of how far we have come.
Another response came from Ed Bielec, vice president of Credit and Risk Management at Canon Financial Services. Ed recalled one of the first serious technologies used in the leasing and finance business in 1973 or 1974 as being one of the earliest Hewlett Packard calculators. “I remember that it cost about $425 at that time, which was a significant amount of cash. Another memory is the first fax machines, which were contraptions that you put your phone receiver into to receive the paper transmission. And who can forget the mimeograph machine, which was used to copy existing documents. As far as phones go, we were still using five-button phones in the ’70s.”
I responded to Ed by telling him that I remembered the Quip machines — an early brand of fax. You had to fix single pages around a drum that fit between two rollers that spun when the machine’s modem connected with the receiving machine. Quality was terrible, and it took forever to send a multipage document.
Ed’s reference to “phone receiver” and “five-button phones” gave me a chuckle. The fax machine coupler was designed for the standard AT&T telephone receiver, which had similar sized round screw-on caps on both the talking and listening ends of the handset. I remember when new competition to AT&T introduced more stylish phones after the Bell breakup in 1984. Many of those phones’ receivers were not round and wouldn’t stay coupled in the fax machines, sometimes requiring two or three attempts to send a single page by fax. And at the bottom of the phone, as Ed recalled, there were buttons that lit up when calls came in and flashed when calls were on “hold.” Each button represented different telephone lines. Receptionists would announce when calls came in on each designated line. “Dexter, you have a call on line three” would be a typical announcement over an intercom that may have been heard by everyone in the business.
Allan Levine, chief operating officer at Madison Capital, described his first encounter with computers when he began his leasing career in 1974. “When I first entered the business, most record details were manual. However, as my original partner was a large auto dealership, we were able to share systems which filled a room. How excited we were to have reports generated that updated your books at the end of every month. Then, we went to reports updated at end of week, to end of day, to instant. That took about five years and into the ‘80s, as we moved to dedicated desktop computers from mainframes, the excitement was riveting.” Allan further recollected, “From late ’80s on, size and speed was the need and desire. I remember my first laptop in the early ’90s, I believe, weighed about ten pounds and was a tad slower than today’s models. My first handheld calculator was used for figuring leases. It cost $400. It did add, subtract, multiply and divide. Today, I can approve equipment or vehicle agreements remotely from an app on my phone or iPad.”
In the not too distant future, Allan will probably be able to approve deals on his wearable computer, like the Samsung Galaxy Gear, mentioned earlier.
Another response illustrated the impact on small-ticket leasing. “I entered the leasing industry in 1972 when I helped my employer acquire a small equipment leasing business in Philadelphia,” began the email response I received from Bruce Kropschot, senior managing director at The Alta Group. He wrote, “The company was a small-ticket lessor and had about 1,000 active accounts. All of the lease receivable records were maintained on posting cards utilizing NCR machines. This system was highly susceptible to errors in the manual postings, and balancing out the receivables was a real chore. The depreciation records for income tax purposes were done manually. How things have changed in the past 40 years.”
We all agree that technology has come a long way since we first started using it in our businesses. We’ve gone from mainframes to mid-range computers to PCs and handhelds. And to bring it all full circle, we’re starting to see cloud applications — which in reality — takes us back to the mainframe with the server and perhaps the software application residing in the cloud. To quote Yogi Berra, “This is like deja vu all over again.”
Imagine trying to explain the concept of a web portal accessible via a mobile app to your boss in 1974. I remember announcing to one of my colleagues in the early ’80s that I had just resigned my position to join a leasing company to finance personal computers. His only response was, “I can’t think of a single thing that I would want to do on a personal computer. Maybe save recipes, but I can’t think of anything else.”
Trying to predict what will come next — the new technologies that we will become reliant upon in the future — is above my pay grade. However, I am confident in stating that big data — the analytic tools that crunch massive amounts of information stored on multiple databases to assist in decision making — will play a role in our industry’s future. Credit scoring will continue to be refined to enable logic-based decision making at higher dollar values than ever before. And communication methods used to deliver information between buyers, sellers and finance partners will improve in speed, accuracy and convenience.
Do you have a different opinion? Share it with me at firstname.lastname@example.org.
Dexter Van Dango is a pen name for a real person who is a senior executive with more than 25 years of experience in the equipment leasing industry. A self-described portly, middle-aged, graying, balding leasing guy in the twilight of a mediocre career, Van Dango will provide occasional insight from the front lines via the Monitor.
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