The global asset finance and leasing industry is a sector that now exceeds $1 trillion and has witnessed phenomenal growth over the past four decades. Financial service providers continue to de-risk their lending environment and traditional lenders are less likely to offer finance in the face of strict regulatory requirements. As a result, organizations and individuals at every scale have had to turn towards alternative financing models to enable the continued growth and optimization of their operations.
Considering the competitive advantages of obtaining finance, the Equipment Leasing and Finance Foundation’s Monthly Confidence Index in the U.S. has revealed that the global confidence in asset finance and leasing has been rising steadily over previous years. In fact, an estimated 60 percent of the investments that are driving the post-recession recovery have come directly from leases, secured loans and asset-backed lines of credit (Lease Foundation). Asset finance and leasing have quickly become the most viable options for funding new equipment and digital initiatives.
In the last decade, digitization has paved the way for how organizations across industries conduct business, and have changed the way customers research, consume and buy products. Similarly, the role of finance and leasing companies has evolved to focus on providing customers with a seamless omnichannel experience. By integrating loan approvals and lease processes with the Internet and digital technologies, an omnichannel user experience provides a customized, convenient and more customer-centric service, which in turn increases loyalty, retention rates and revenues.
The Cisco Global Credit Organization manages the credit risk associated with 100 percent of Cisco’s revenues generated from a combination of both trade (open account) sales, as well as term financing (leases and loans). Historically, different credit platforms were maintained to underwrite and evaluate the risk assessment for term and trade credit granting, as well as to maintain compliance and portfolio management activities.
As business models evolve and digitization permeates, it became incrementally more challenging to maintain high levels of compliance, quality of underwriting, portfolio management and reporting without increasing operations cost or adversely impacting the sales stream. Cisco developed a more advanced credit platform that had the capability to quickly adapt in a dynamic industry. This created the opportunity to replace former credit systems and with a consolidated platform that could drive continued innovation and maintain best-of-breed credit practices.
Finance and leasing companies such as Cisco Capital are now partnering with technology companies to improve the origination experience. By capturing comprehensive customer data, these companies can offer a targeted cross-sell and upsell through an omnichannel presence and enhance integration with resellers and dealers. As such, finance and leasing companies across the world are evolving with digital enablement solutions and have developed new business models to meet the demands of the technological evolution.
The adoption of digital technologies has already made its way into the asset finance and leasing industry worldwide. This is done by streamlining operations for finance companies and helping to optimize productivity while significantly reducing costs. For customers, digitization provides a seamless and superior user experience, oftentimes customized for the customer’s unique environment. It is expected that by 2020, 85 percent of a customer’s brand experience will occur without any human interaction, and therefore, we anticipate that the entire buying journey for many will likely transition to entirely digital soon (Gartner).