When we experience something new and feel that we’ve experienced it before, we call it déjà vu. But vuja de, the act of looking at something familiar with fresh eyes, is what can most benefit the equipment finance industry. Deborah Reuben takes a look at ways firms are enacting their own version of vuja de, especially when it comes to technological innovation.
Deborah Reuben, President, Reuben Creative
University of Pennsylvania organizational psychology professor Adam Grant once said, “The hallmark of originality is rejecting the default and exploring whether a better option exists.”
Consider the story of eyeglass company Warby Parker. As college students buried in debt and outraged at the cost of replacing broken eyeglasses, Jeff Raider, Neil Blumenthal and David Gilboa, the founders of Warby Parker, wondered why glasses commanded such a hefty price tag when the technology had not changed for years. Their research revealed that a single European company dominated the industry, and nothing in the cost of goods justified the high price. Which led to their next question: what if the experience of buying eyewear could be radically different? The threesome created an online eyewear business and brought the entire process in-house. The rest is history.
That moment of questioning (“Why are eyeglasses so expensive?”) is what Grant calls “vuja de,” which he defines as the opposite of déjà vu: “Vuja de is [when] we face something familiar, but we see it with a fresh perspective that enables us to gain new insights into old problems.” In other words, when we stop taking the status quo for granted and begin to ask new questions, we can see old problems through a new lens.
How can vuja de thinking about technology shape our industry? Technological possibilities present the opportunity to step back and re-imagine how things could be, not based on how it has worked in the past but on where technology could go and tracking those trends. So, how do we keep up with that change, what does it mean for equipment finance, and where do we even begin?
It can be challenging to adopt cutting-edge technologies, but the opportunity for digital transformation in equipment finance is enormous. Al Brandt, co-founder and CEO of blockchain company Blocledger, comments, “It is surprising just how much digitization is left to do in this industry.”
“Innovations in the consumer world are pushing the B2B world, while access to rapidly advancing technologies is accelerating change,” says Chad Hutchison, co-founder and president of Finance Exchange.
Kristian Dolan, Tamarack Consulting’s chief operating officer, echoes, “The new normal is cloud and mobile. Increasingly, business people need to be able to do everything from their phone.”
“I think blockchain has the greatest potential to change the industry radically. Blockchain is a way for companies to band together, sharing even the most complex, sensitive transactions in a highly secure manner,” says LEAF Commercial Capital Senior Vice President Mike McKie.
“Many companies realize that blockchain has the tremendous possibility to benefit this industry, but we are early, and there are no easy on-ramps to this technology yet,” adds Brandt.
Innovation Finance President Mark Tomaselli echoes this thought. “It’s not that companies are not thinking about these technology opportunities. Many don’t know where to begin. “
Vuja de thinking about innovation goes beyond focusing on any single technology but looks at the intersection of multiple possibilities. So, where do you begin? One place to start is curiosity about the ideal customer experience: what if leasing could be as easy as Amazon Prime?
For example, Innovation Finance’s QuickFi flips the script on an old question. Rather than starting with technology and asking, “How can we extend this to customers?” Innovation defines the customer’s ideal experience first, then shapes the technology around it.
Create New Solutions
“By asking these questions about customer experience first, we are creating a new mobile onboarding experience,” Tomaselli says, “Leveraging existing applications to rapidly create new solutions is how we are incorporating blockchain, machine vision, and machine learning to create [that] experience for our customers.”
In the past, digital transformation in this industry centered on establishing a digital foundation for core capabilities like CRM, originations, and servicing.
“Because we grew up with so many ad-hoc systems, established companies must deal with the digital foundation,” says GreatAmerica’s Senior Vice President of IT Channels and Services Greg VanDeWalker. “When I think of where we are going, two words come to mind: instant and flexible.”
Smartphones deliver “instant” into our daily lives, whether its banking, food delivery, or getting from here to there; we have immediate access at our fingertips. The manual, paper-filled business environment is a different world. “Instant is about designing the finance experience more like a consumer experience. Flexible is about enabling consumption/usage, with customers paying for what they use, requiring collaboration among OEMs, distributors, and the finance company,” says VanDeWalker.
A common (and costly) mistake is building customer-facing capabilities from outdated assumptions rather than a real-time understanding of trends and customer needs. With a laser-like focus on understanding customer needs, GreatAmerica avoids this trap by asking questions and staying on top of the trends, understanding the pulse of the customer.
Inviting vendor partners to your portal is a common approach, but GreatAmerica looks at it differently. Says VanDeWalker, “Deep understanding of our customers led to a strategic decision not to require them to come to our platform. Instead, we embed our capabilities in the tools they use every day, making it easy for them to sell more using our financing.”
Vuja de thinking is happening across the entire equipment financing lifecycle, with both startups and established lessors and service providers challenging the status quo.
Technology applied to marketing and sales is changing the game. “Salespeople have been told for years that more calls equal more sales. That’s true,” says Michelle Speranza, chief marketing officer at LEAF Commercial Capital. “But technology enables us to move beyond that, connecting with the right opportunity at the right time over the right channel. With advanced analytics to enhance the sales process, sales reps [can] use data to determine whom to call next rather than gut feel.”
“We’re always asking how we can streamline the financing process for the customer, changing our questions as technology makes new things possible,” adds McKie. “We’re working on integrating with partners and third-party platforms using application program interfaces, artificial intelligence, accelerated credit decisions, and improved fraud checking, as well as validation of approved contract signers.”
Michael Levison, CEO of ALS Resolvion, a nationwide skip trace and repossession management services firm, looks at how game-changing technology is radically altering the consumer and commercial recovery space, with AI augmenting the capabilities of less experienced human agents to perform on a higher level. “Artificial intelligence enables manipulation of large data sets, recognizing new connections and patterns in data that would be impossible for humans to find,” he says
ALS Resolvion has also leveraged machine vision and GPS in what is referred to in the marketplace as license plate recognition (LPR) technology. The LPR network has more than 3000 recovery vehicles equipped with cameras and mobile devices connected in real-time to a centralized database, which can scan 170 million plates per month. Algorithms enable instant checking and matching against the repossession database, automatically alerting recovery agents to the immediate and appropriate actions on a case.
This innovative combination of technology yields several benefits to lenders.
“It is much easier to find equipment, and more advanced versions can be used to disable its use, making a recovery even easier,” says Levison. Not only does it increase the volume of successful commercial recoveries, but the recoveries are speedier, leading to higher remarketing value for the collateral. ”If lenders can reliably factor in recovery and resale of equipment, they may be able to be more aggressive in some of their underwritings.”
“We’ve seen that buyers and sellers can be hesitant about our syndication platform because of fear. It’s a threat to the way things have always been done,” says Hutchison. “[But] applying technology to the aspects of our business traditionally centered on gut feel won’t eliminate jobs, it will increase the volume that can be done.”
For DLL, vuja de involves a commitment to “outside-in” thinking, by bringing vendors into its design process. By co-designing, the company can see where vendors are going and reimagine various aspects of its business model to provide a customer experience aimed at retaining and attracting financing partners.
People Powering Technology
With no legacy holding them back, startups have the luxury of reimagination. For established companies, it’s a different story; they need to dedicate people to the role of thinking about the future of the business and still deliver results today. Says Rafe Rosato, chief innovation officer at DLL, “We considered the landscape of traditional companies being disrupted by small technology-enabled companies that have no legacy holding them back. Rather than waiting around to be disrupted, we decided to disrupt ourselves. Like anthropologists, we studied our customers, and asked ourselves, how might we create a new experience for our vendors?”
Beyond reimagining its business model and customer experience, DLL dedicates resources to reimagining the culture and environment in which its team works. By creating a diverse and inclusive workplace with family-friendly policies and programs designed to support wellbeing, the company is innovating its culture to attract the best and brightest talent. As Rosato states, “We are equally invested in enhancing human performance by reimagining the system in which our members are participating.”
One may think this has nothing to do with technology, but bringing innovative visions to life takes an engaged, energized, committed team empowered to be curious and probing.
By viewing an old product and process through a new lens, Warby Parker went on to become a startup unicorn with a billion-dollar valuation. Today, it makes it easy and affordable for many people to see through new lenses.
Beyond technology, game-changing innovation requires a shift in mindset, to boldly ask new questions and confront fundamental beliefs about how things should be. Déjà vu spontaneously happens. Vuja de is something you can choose to do. What is possible for the future of your business if you decide to look at it through a new lens?
Kenneth P. Weinberg,
Baker, Donelson, Bearman, Caldwell & Berkowitz
Usury laws vary from state to state, which can make a lease or loan more complicated when the lessor is in one state and the lessee in another. Kenneth Weinberg discusses how this has played out so far in the courts, with favorable rulings for a lessor often depending not only on who files first, but where they file from.
With all the hype about blockchain revolutionizing the way business gets done globally, have you ever stopped to think about whether the equipment leasing and finance industry is ready to dive into this potentially disruptive technology?