The asset finance industry is quickly changing, due to increased consumer interest, new regulations and, most of all, technology. New tools and platforms are changing the playing field for asset finance businesses, as competitors and developers find new ways to help clients through the lending experience. To stay ahead, it’s essential for brokers to understand the changes now and start taking steps to future proof their firms. These are four key asset finance trends that will allow businesses to scale to marketplace opportunities.
1. Fintech is still on rise (let it be an advantage)
After the 2008 financial crisis, the UK government put in place measures to increase the rangeof lending options for SMEs. While this has benefited all alternative lenders, well-funded fintechs took the opportunity and ran with it, doubling their market share in the last four years.
Unencumbered by legacy systems, these challengers have been able to automate more of their manual work, improve choice for customers and focus on creating a frictionless lending experience. This advantage was apparent when traditional lenders struggled with loan applications from the CBILS due to inadequate infrastructure and technology, while fintechs were able to offer quick, scalable lending processes.
Their growth highlights the appetite for a modern approach to lending and leasing. In the face of new competition some banks are building their own platforms, while others look to partner up with new challengers. Similarly, asset finance professionals will need to leverage technology to maintain their role as a trusted lender for SMEs. This begins with implementing new tools that will accelerate processes and update workflows. Amidst the recent coronavirus outbreak, brokers required solutions to streamlines processes, and some fintech have mobilised themselves to provide them digital tools to do so. An example of this is Quotevine’s Quickstart Package, a solution created for asset finance brokers to help SMEs and scale their businesses. With the correct support, businesses can integrate the technological capabilities of fintech challengers to create a service that combines expertise with an up-to-date user experience that adds more value for customers and team alike.
2. We’ll all be depending on AI (so deploy it tactically)
Artificial intelligence has been making steady progress in the financial industry, to the point that Goldman Sachs employs more programmers than facebook as it looks to gain competitive advantage through technology. PwC now predicts that global GDP will be 14% higher in 2030, thanks to AI, adding $15.7 trillion to the global economy. For asset finance firms, the question is not ‘if’ AI will change the industry, or even ‘when’, since it’s already in use for a range of purposes. Asset finance professionals must consider how they can best leverage the unique capabilities of AI to provide customer value and improve service.
AI tools, especially those built on machine learning algorithms, excel at analysing large data sets and finding patterns quickly. We’re already seeing value in accelerated compliance and data processing, automatic analysis of supporting documents and instant credit scoring. This has the potential to drastically expedite the lending process, saving time for customers and brokers by finding the right deal in real time.
This doesn’t mean the end of brokers though. The value of AI tools will depend on the judgement of those using them, pushing brokers to focus more than ever on service and relationships. The asset finance experience of the future will be a hybrid, combining a human understanding and insights on the unique needs of the customer with modern data analysis tools to create faster, fairer solutions.
3. Customer experience matters more than ever (so put it first)
As user-friendly digital solutions become more embedded in our day to day lives, customers are increasingly unwilling to put up with poor experience from their financial partners. A recent global fintech study highlighted narrow product choice, lack of personalization and inability to match needs or preference as key drawbacks in financial service providers. The result was that nearly 50% were looking to change banks in the next 12 months.
It’s never been easier for consumers to find new financial service providers, transferring their business at the click of a button. That’s why it’s essential for asset finance businesses to manage their customer journey effectively, starting with reliable customer data.
End-to-end customer relationship management (CRM) tools will become an essential part of customer service. By centralising insights across client bases, they ensure every team member has the information they need to deal with each customer on a personalised basis, based on real-time data.
With increased competition in the asset finance space, customer experience will also become a key competition area. To keep up, brokers will need to implement specialised asset finance CRM solutions, automating manual tasks to focus more on client engagement and retention. Brokers turn to solution providers, such as Quotevine that offer SaaS solutions to either update or connect outdated or seperate technology, with an end-to-end solution for a seamless customer lifecycle. It notably equips brokers with features like ESign or automated SMS to ensure the consistent communication customers expect.
4. End-to-end digital processes will be the norm (so focus on connectivity)
The growth in digital banking and online services has brought more financial data online than ever before. This enables huge gains in productivity for lenders by connecting existing data points to streamline their processes and customer experience.
A key example is quotes and lending rates. In times of market volatility it’s essential to have up to date information on the latest prices for customers. By using a digital asset finance solution that automatically accesses the latest rates, a faster and more personalised service is created, offering customers the right choice for them. Online quotes also increase flexibility, generating and sharing proposals across multiple devices, locations and team members as needed.
In the digital-first world, it’s up to brokers to create trust and value from these solutions. By combining personal insight with tools such as e-signatures, automated customer education and tailored analysis, brokers can build stronger client relationships while also focusing more on helping SMEs succeed in the long term.
Asset finance businesses have an essential role to play in driving the success of SMEs. However, with increasing competition and changing customer needs, the future success of asset finance businesses will depend on their ability to understand and embrace the asset finance trends shaping the industry.