One important recent development in the Nordics and Baltics has been the acquisition of asset finance software provider Emric by Tieto. Asset Finance International asked Luis Maynar, Head of Business Development Banking & Finance at Tieto for comment on how the leasing markets can benefit from innovation in technology.
Asset Finance International: As a leading supplier of software and service solutions in the Nordic region, what are your views on the adoption of technology for asset finance? What steps should leasing companies be taking now to benefit from technological innovation?
Luis Maynar: In our view asset finance solutions are moving in the following direction:
- Process automation and consolidation – through end-to-end systems: from origination, fulfilment and servicing that are highly configurable and that embed business rules and workflow engines;
- Extension of the value chain to provide end-to-end processing, including collections management;
- Single view of the customer in terms of relationships, credit limit, exposures and risk;
- Rapid response to regulatory changes – through rules-driven accounting, for example; and
- Native support for multi-languages and multi-currency.
In response to these challenges companies are:
- Replacing silo-based systems with more modern parametrical solutions that allow end-to-end processing; and
- Lowering operations cost via business process outsourcing.
AFI: Is leasing technology being updated fast enough in the post-recession environment in Europe? Are lessors being held back by out-of-date technology?
LM: We believe that lessors could gain competitive advantage through utilizing the latest technology. This could be from advanced scoring systems to implementation of new emerging technologies, e.g. blockchain technology for trade financing. It’s clear that there’s money to be saved and customers to be acquired through technical competiveness.
AFI: How can these leasing companies best exploit the increasing interconnectedness of their markets?
LM: Increased interconnectedness will help leasing companies to improve their models of asset valuation from how much a machine is used to how and where a car is driven. It is also a way to understand their customer preferences and behaviours to develop their services and offers in a fast-paced changing environment. The interconnectedness can also prevent un-predicted maintenance and help the service provider to improve their service offering.
AFI: Finally, from your company’s perspective, what is the outlook for business across the Nordic and Baltic region?
LM: In the Nordic market we see a great demand for digitalisation programs that aim at streamlining the customer experience across any customer touchpoint. Different strategies are taken. Some banks favour a ‘wrap-around’ strategy, whereby the more substantial changes are done on the front-end while re-plumbing processes to their existing legacy infrastructure.
Other banks favour a more vertical transformation approach, replacing both front- and back-end solutions by newly architected packaged solutions. In general, the key challenges reside in formulating a transformation strategy and business case and, more importantly, in the execution of the transformation programmes.