By Per Högberg, Director of Asset Finance in Banqsoft
During the last 18 months, many organizations slowed down their rate of change in larger initiatives and investments to focus mainly on offerings driven from the characteristics and impacts of the pandemic on society.
Some key trends were an increased market percentage penetration in consumer leasing as well as new initiatives in used car leasing. Short-term uncertainty on market outlook also put emphasis on robustness in dealer network stock finance programs.
Many programs on the early drawing board, such as for example establishing a fully digital 360-degree customer view on on-boarding, including dealership experience, got put on hold. Similar trends could be observed in direct sales initiatives, albeit we have seen some organizations going bold and playing the long game taking clear steps in that direction, to ensure their plans will not be slowed down. Will these players be the ones that capitalize from a head start?
New players offering subscription and car sharing type services are now entering the markets, putting pressure on the larger established financial services providers such as captives and larger banks. At the same time, some of the large players are clearly committed to take a market share, where in the Nordic region Toyota’s launch of the Kinto concept is a clear example where one of the big established brands appears to have timed this right from a market perspective.
While car sharing services are emerging in
the markets, consumer car leasing is continually growing its market share in
relation to financing via loans both for new and used cars. What requirements
are important when you intend to win a new leasing contract with customers not
necessarily interested in car sharing or other new paradigm shifting mobility
concepts? To be relevant in this market, managing change faster than the
players you want to out-compete is key.
Convenience and Simplicity
Browse through and compare the customer-facing websites for some key automotive brands and see how many clicks and choices you need to make before considering a final lease offer. Is it even possible to execute this process in a fully digital way online without sending an email or asynchronous request to enquire how a specific option will impact the monthly fee?
In our minds at Banqsoft, we assess that many of the effects we’ve seen in the market during the pandemic period are here to stay. There is an increased customer demand for convenient solutions, which is impacting behavior also for customers not necessarily interested in car sharing or other new paradigm shifting mobility concepts. When an end-customer takes interest, whether a new business or retaining an existing financial services customer on a new contract, it needs to be convenient when choosing the best vehicle matching the monthly cost setup. The service provider must focus on offering simplicity and a seamless experience where vehicle selection and financing options, with all required interaction points, are all coherently designed.
IT Landscape and Services
Is your financial services IT landscape ready to meet these requirements? And to meet evolving and changing requirements in the coming years? In maintaining and developing an IT landscape that meets business requirements, we at Banqsoft see how different approaches over time can lead to very different results. To clarify, a pick-and-choose approach vs choosing a full-stack offering puts very different requirements on the financial services entity in terms of own resources and expertise, not only in terms of easily identifiable IT architectural expertise, but also in terms of driving changes across different partnerships, software products and delivering teams.
For the last 5 years, we have seen the SaaS delivery model become the predominant approach chosen when replacing any core services in an asset finance IT landscape. Obvious merits being time to market and taking the efforts and needed skillsets of continuously upgrading software infrastructure and applications off the table, in terms of the financials services entity workforce. Does the financial services entity have what it takes to co-ordinate and drive changes across the end-to-end lifecycle process of a customer? If in fact the resources are in place, would their expertise not give more value if you could maximize their interaction with the business and minimize tasks in coordinating workstreams cross multiple vendors?
A large part of the answer on how to maximize efficiency, in other words, enabling a setup with IT and business expertise collaborating closely together with shared objectives, is not technical but rather in how you establish a partnership with a SaaS system vendor in which your asset finance offerings are covered as much as possible from an end-to-end customer life-cycle perspective. With partnership also comes the advisory consultant support which is equally important for both vendor and client and can be further boosted by joint experimenting with new financial product offerings and packages. With a system setup delivered in a SaaS model, the vendor can quickly commission a new application environment for joint verification, test and tweaking of a new scenario. De-commissioning once the environment has served its purpose is just by a click of the mouse.
Thinking about the system delivered as an
upside-down pyramid, with the base now facing upwards – and to the financial
services entity agents, leads, prospects and customers – this is the area where
you should really experiment with your setups. The further you go down (in the upside-down
pyramid) the more you want to rely on proven standardized processing also
recognizing that the cost/benefit ratio of standardization increases at
back-office volume processing, seeking automation and efficiency. It is when
attracting new business, you need to be unique.
Real-time Analytics
Business is moving faster, where customers will increasingly be less inclined to stay in process if the process itself is perceived as slow or cumbersome. The competitor is always just a few clicks away. What requirements does this put on your solutions for analyzing the performance of your business processes? Next day availability of analytics data and dashboarding is clearly no longer adequate. The dashboard for your onboarding process from point of sales through contract activation needs to be real-time as basis for optimization and quick decision making. In many cases, to get a full 360-degree perspective on processing from the customer perspective, you also need to connect data points across your IT landscape and the IT landscape of your partners.
The underlying technology to achieve this is today robust and proven, where adding the asset finance business domain expertise and full insights into underlying data models give the ability to package real-time analytics and dashboarding into a quickly deployed solution in sharp contrast to old school data warehouse projects. In Banqsoft, our product offering in this area is what we call IntelliView - a key integrated component of our View21 product suite.
Banqsoft’s Nordic Heritage
Banqsoft offers a complete end-to-end software suite and service offering for the asset finance industry, with long experience from both the market leading position in the Nordic region as well as financial services businesses in more than 30 markets around the globe powered by Banqsoft’s View21 financial software suite.
Looking at the Nordics in a European perspective this region has been, and still is, in the forefront in terms of digitalization. Key elements such as mobile bank ID quickly became the market standard for consumer contract signing already in the years 2011-2012, with Denmark being the last Nordic country to come fully on-board. From those days, digitalization has continued to move forward throughout the value chain as our Banqsoft customers continuously seek to improve their end-customer experience and optimize back-office process execution.
Per Högberg
Director of Asset Finance
per.hogberg@banqsoft.se
