Agility is the key to a successful asset finance business of the future

Increasing consumer demand for highly customized services, intuitive interfaces, robust security, and transparent business practices has transformed the asset finance industry over the past few years. Many equipment finance organizations have begun their digital transformation with customer-centricity as the guiding principle, but in today’s dynamic and competitive market, flexibility in incorporating new and emerging technologies is critical to maintaining a competitive edge.

A company needs to adopt evolving data-driven approaches to increase market share, use cloud technology for security, and leverage artificial intelligence for personalized and contextual service, in alignment with its vision and strategy. It is no longer a choice but a necessity for enterprises to be agile, adaptable, and responsive as they undergo digital transformation.

An asset finance company’s digital transformation program must consider the following factors:

• Customers at the heart and soul of your business – We live in a world where consumers expect seamless and seamless experiences across all channels, services, and products. Additionally, asset finance companies are expected to create products and services that are personalized to their preferences and goals, with underlying platforms that provide competitive pricing, which can educate consumers, and which can support additional tools.

• Accelerate time-to-value – In the same way, Moore’s Law predicts that transistor count doubles on integrated circuits every two years, and consumers expect their lessors to double their value proposition in about 1 and a half years, or less. To remain competitive, equipment finance organizations must have a smooth innovation delivery pipeline that tracks market trends, tests innovative products, and iterates rapidly for continuous improvement. By catering to changing consumer preferences, asset finance companies can improve customer stickiness through an agile, on-demand innovation pipeline.

• Agile development with the minimum viable product (MVP) mindset – In a recent report, 61% of respondents from asset finance and FinTech firms felt they were good at generating ideas, however only 41% said they were good at developing MVPs (Minimum Viable Product). To achieve customer-centricity, product teams need to have a consumer-driven focus and use continuous feedback to drive continuous improvement. To accomplish this, collaboration between technology and business teams is essential, as well as a robust tooling ecosystem and an incremental approach to MVP development. A digital strategy like this will enable you to roll out much-needed capabilities quickly and avoid becoming obsolete.

• Replace legacy with digital– Although digital technologies such as the cloud, big data, and analytics can improve efficiency within firms, they still require information to pass between legacy systems and data residing on-premises. To achieve faster release cycles, it is crucial to modernize core systems using micro-services and APIs (Application Programming Interfaces), in addition to DevOps for continuous integration and continuous delivery.

• Build the right skill sets – As automation replaces routine tasks and machine learning improves process efficiency, organizations must be aware of concerns related to automation anxiety. To develop a culture of learning, firms need to organize hackathons and ideathons, instill entrepreneurial thinking in their workforce, invest in cross-functional teams, and reskill their workers on emerging technologies.

Agile will transform asset finance industry as we know it 

One of the underlying themes in digital transformation success factors is agility. Across the globe, Odessa has assisted asset finance companies to adopt agile approaches to realize greater value. We have found that there are five common themes underpinning our experience:

Do not lose track of the bigger picture: You can imagine digital transformation as a roadmap of milestones that need to be reached, features that need to be released incrementally, or a chart of targeted outcomes that need to be achieved over time. The advantage of agile teams is that they can see the bigger picture, which provides them with a better understanding of the steps necessary to reach their small and large objectives. Teams such as these consist of multi-skilled personnel who collaborate well across the organization to identify challenges, produce solutions, and apply them precisely to solve them. In addition to iterative delivery, agile teams also show frequent demos to business teams to ensure greater involvement, enabling IT (Information Technology) and business alignment.

Shift project-based to a product-driven mindset: Agile is still often viewed as a technology-related concept aimed at improving project delivery by identifying defects, meeting deadlines, and achieving milestones. It includes customer-centricity, business-driven IT, outcome-oriented change and delivering business value from each project. Agile represents a new way of thinking that goes beyond smooth project delivery. Agile projects are delivered continuously, fulfilling top priorities first while responding to evolving requirements by putting customers at the heart of development, testing, and deployment.

Align with business outcomes and not just technical revamp: The key to enabling digital capabilities is not simply adopting modern technologies but driving better business results in the end. This is where agile comes into play. Prioritize features based on business value to facilitate an outcome-driven mindset; shorter and more frequent release cycles provide early visibility to business, thus amplifying feedback loops. If pivoting is necessary, keeping the target outcomes in mind makes it easier.

Get a partner with DevOps-based service delivery: It is the goal of organizational agility to develop a continuous cycle of brainstorming ideas, developing new capabilities, and delivering high-quality products and services. An ecosystem of technologies and tools utilizing DevOps techniques is necessary for the creation of ideas, the development of features online, and the delivery of features on demand.

Conclusion

To track the success of their digital transformation programs, asset finance firms are measuring and reporting key business indicators. Among these metrics is the percentage increase in customers’ adoption of digital technology, the average time from application to funding, the cost reduction in account servicing, the number of assets retained, and the overall increase in customer satisfaction.

To succeed in digital transformation, you must focus on enabling customer-centricity, reducing time-to-value, releasing minimum viable products, modernizing legacy systems, and training and enabling your workforce. A crucial aspect of achieving the above outcomes has been the adoption of enterprise agile. With agile approaches, equipment finance companies can connect each step of their transformation journey to the bigger picture, adopt a product-centric mindset, drive better outcomes, leverage DevOps for on-demand delivery, and create a culture of accountability. This will enable asset finance companies to achieve greater business growth, higher product quality, and a delightful consumer experience with these capabilities.

About Odessa: 

Headquartered in Philadelphia, USA, Odessa is a software company exclusively focused in the leasing industry. The Odessa Platform powers a diverse customer base globally, providing end-to-end, extensible solutions for lease and loan origination and portfolio management. Odessa facilitates business agility through rich feature sets including low-code development, test automation, reporting and business intelligence to ensure organizations can more effectively align business and IT objectives.