Chair’s opening remarks and conference welcome

-

Welcome to Asset Finance Connect, the new name for the IAFN conference and awards.

Our new name and “pac-man” style logo (does it look like talking heads interacting across a virtual space to you??) is just one example of enduring change resulting from our organisation’s response to the pandemic.

During the pandemic many of you will have attended our online community events designed to increase networking and connections without meeting face-to-face.

These include regular small scale invitation-only meetings for up to 100 senior participants as well as larger interaction-at-scale webcasts attended by 500 or more attendees over their lunch hours. Through our communities we bring practitioners together to help make connections, to share concerns and spark new ideas which we hope will drive new business opportunities. At a time when the industry is changing fast, it has never been as important to participate in thought leadership discussions.

We launched three communities during 2020.

  • European auto finance professionals lead by David Betteley;
  • European equipment finance professionals lead by John Rees; and
  • UK asset finance professionals lead by Stephen Bassett.

All our meetings were designed to spark ideas among members, initially helping them to find ways to manage circumstances for which few of us were prepared. Inevitably the conversation has shifted towards the new normal - adapting to permanent pandemic-driven change.

Now that the pandemic is nearly over we return in addition to physical conferences - with the first taking place on 9th November.

It will cover and further extend all the topics our communities have been discussing including:

1) A five year leap forward in digitalisation as finance companies have been forced to accelerate development of systems which allow them to transact online.

At Asset Finance Connect we have watched the explosion of digital solutions which allow organisations to operate remotely – including the emergence of direct to customer (D2C) platforms adopted by manufacturers. Car companies have this process well underway and are already changing the role of their traditional partners – for example changing dealers into agents, removing retailers control over pricing and their ability to compete against each other and against other channels to market. This wave of change will inevitably change the role of finance providers too – as OEMs take increasing control over their customer journey and their customer touchpoints.

As D2C develops we expect OEMs will increasingly seek to work with partners who enhance their digital experience. Earlier this year, I interviewed Daniella Weitman from DLL. She has just transferred from Nike, a leader in digital ecosystems during the pandemic. She told me that NIKE ditched Amazon as a partner because they added nothing to the customer journey beyond operational excellence. What NIKE wanted was to build compelling customer journeys that did more than just efficiently despatch sneakers to customers when they wanted them.

The lesson for asset finance providers is that investing in digitalisation to simply improve operational excellence is no longer the frontier. The leaders are focussed on managing the digital relationship of asset users on behalf of the OEM – deepening the relationship with customers, improving the journey, increasing loyalty and playing their part in driving up customer lifetime values.

The priority in digitalisation is to invest in processes that customers attach value to. There are so many examples of digitalising processes that customers don’t want to buy – for example investing in subscriptions platforms that enable the customer to swap the car every month/ or swap vehicle entirely – som,ething which the customers don’t actually seem to want!

2) The transition in focus of ESG (environmental social and governance) to the heart of business and the core of asset finance.

One technology company CEO remarked to me the other day that the change in focus and importance of ESG appears to have happened in the last six months. Some of the many manufacturers we have interviewed over the pandemic have been telling us they have started to win or lose orders based on their ESG credentials. ESG no longer means sending aid, or clean water to help people in famine areas – it means setting objectives which contribute to global goals, reporting on them and understanding that your performance will determine whether you win new business from other organisations keen to promote their ESG credentials.

What are the opportunities for the asset finance organisation in this? There are certainly challenges in managing the transition.

Early research from Asset Finance Connect suggests that there is a quick opportunity for asset finance companies to enable the funding for green assets. Fleet leasing companies are already leading the way on enabling finance for battery electric vehicles, but what are the opportunities to work in partnership with governments to drive new long-term funding products to enable companies to afford ESG assets which will drive ESG targets without necessarily driving their financial targets?

Closer to home we’re ready to talk about how the industry can leverage its asset management capabilities, to extend their focus on financing used or refurbished assets and to focus on asset disposal and other ways the industry can participate in developing the circular economy.

And perhaps in the longer term we wonder whether outcome-based or consumption-based payment models offer the potential to break the trade-cycle, focussing instead on the alternate objective of maximising revenue and economic value over each asset.

Does the asset finance industry hold the keys to maximising the lifetime value of assets – making this an achievable tenet for the new emerging ESG-aware business world?

Lots to discuss!

Join us now for the event – which includes all of the usual activities you tell us you enjoy. Don’t miss the interviews with industry thought leaders, please prepare your questions! Vote on the latest technology solutions you can quickly deploy in your businesses. And don’t forget to nominate your business or your boss for an award.

I look forward to seeing you on 9th November!


Edward Peck Founder Asset Finance Connect

Speaker
founder
Asset Finance Connect