"Things we know: this crisis is temporary; the equipment leasing and finance industry’s resilience and resolve are enduring.” - Ralph Petta, ELFA President and CEO, Monthly Leasing and Finance Index March 2020
Equipment finance is central to business in North America. We’ll soon see the incredible resiliency of the industry and that many financial institutions are learning how to run leaner, gain efficiencies and create an optimal customer experience because of the challenges they’ve been presented with in 2020. Here are 4 ways equipment financers can strengthen their business:
1. Be flexible, control your configurations
The market is likely going to change, and shift, and change again. In a fast-moving market, you’ll be adjusting your processes as needed, and your asset financing software should make it easy for you to adjust workflows instantly, reset your parameters on auto-decisioning as often as needed. Application volume might increase as businesses work to get back on their feet and re-capitalize, however, as an example, your former auto-approvals may no longer be as creditworthy. Anecdotally Nancy Pistorio, CLFP, President at Madison Capital LLC says, “As evidenced by declining approvals, new business is and will continue to be negatively impacted”.
2. Set up a fully-digital transaction
Many equipment financers had made progress on digital transformation, but few could say they didn’t skip a beat during the pandemic. Customer convenience isn’t a short-term trend; creating a transaction that can be done anywhere, any time and on any device From digital application options to offering e-signature, is key to adding resilience.
3. Connect your IT landscape
The C Suite business leader panelists in Monitor’s recent Live+ event “Asking the C Suite: What’s Next for Equipment Finance?” reported their respective companies adjusting quickly to the pandemic, due to technologies like e-signing and portals. However, they do report that communication was strained, both internally and externally. Now that business continuity plans are becoming business-as-usual, especially as working from home may become a more regular occurrence, financial institutions will need to fill communication gaps and get everyone on one page. One way to accomplish total transparency is to connect technology solutions, so systems “talk” and relationship managers can see everything in one place or seek out end-to-end solutions that bring all the disparate processes under one roof.
4. Consider artificial intelligence
Financers are data rich, but many don’t know how to harness that data. Artificial intelligence is just scratching the surface of the lending industry (starting to gain traction first, as always seems to be the case, in mortgage and consumer lending). AI can help you learn, predict and prospect with your own data. A key here as financial institutions need to run leaner without introducing more risk, is that AI can review mountains of applications quickly and start to predict which will be profitable and which will default, based on what’s happened in similar cases. A slew of vendors who specialize in artificial intelligence and machine learning are no doubt excited to bring the big data of financial institutions into their ranks.
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Sales and Account Management, Lending & Leasing
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