European automotive

Will Chinese electric car manufacturers transform the UK BEV market?


There have been many challenges for the battery electric vehicle (BEV) market in the UK auto industry, including supply and demand, residual values, price parity, lack of long-term government incentives, charging infrastructure, and battery manufacturing factories.

The Chinese auto industry, the biggest in the world, with its dominance in car manufacturing and battery technology, is beginning to move its Chinese electric vehicle (EV) brands to Europe and the UK, offering cheaper, high-quality, technologically enhanced models which are seen as a threat to European automakers.

Toby Marshall, Managing Director of GWM ORA UK discussed the entrance of disruptors from the Chinese market to the UK, including GWM ORA’s Funky Cat, with David Betteley at the Asset Finance Connect Summer 2023 conference, and the implications for European car manufacturers.

Headwinds of battery electric cars

Changes in the EV market, including Tesla, NIO and others discounting prices has created added complexity to the EV market, as used EV values falter and stock becomes ever more extended.

As Toby Marshall noted, 2022 saw huge demand for EVs but low supply, while 2023 has seen a dramatic shift with supply picking up with established brands as well as new EV brands coming into the marketplace. Residual values of EVs are also normalizing in 2023 (at a significantly lower level than a year ago) as the EV market becomes more established and stable, with price parity between EVs and their ICE counterparts getting closer all the time.

At the beginning of 2023 there was a lot of negative media coverage surrounding electric vehicles, from range anxiety to charging infrastructure and the cost of public charging, but hopefully this negative blip is starting to subside.

In a recent Lloyds Insight article, Nick Williams, Managing Director for Transport at Lloyds Banking Group commented that, “2022 was a record year for electric vehicle (EV) registrations, with a 40% year-on-year increase despite ongoing supply chain issues – and 2023 is set to see this acceleration get a major boost.

We’ll see more new vehicles, with more choice for drivers than ever before. As well as traditional brands set to increase their electric vehicle ranges and offers, this year we can also expect to see more new manufacturers, including some disruptive new names. Many of these disruptors are coming from the Chinese market.”

Chinese auto market

The UK and European car markets are very different to the Chinese market which is by far the biggest car market in the world, with indications that it will grow to 30 million cars a year compared with 2 million in the UK. China is also the biggest electric car market in the world with a huge offering of electric car manufacturers.

In addition to Chinese car manufacturers, Chinese battery makers dominate the European motor industry, with more factories than any other nation.

Moving Chinese brands to Europe and the UK

Chinese car makers have been working to establish a foothold in the European and UK markets for many years, with an influx of new Chinese brands starting to access the market, including BYD, NIO, Ng, Polestar and GWM ORA.

There are many opportunities for Chinese BEVs in Europe and the UK markets, where they are outperforming western brands with their high-quality infotainment systems, better cameras and sensors, and are likely to lead the way in semi-autonomy and in-car services in the future.

The arrival of Chinese electric brands brings a range of opportunities and challenges for UK and European dealers and finance houses in addition to challenges for western OEMs. A recent survey by Startline Motor Finance highlighted that 51% of dealers expect the arrival of Chinese OEMs will result in some European manufacturers folding and 29% believe it is the European manufacturers that will fare worse in the transition to green.

With many European brands moving away from manufacturing smaller cars to focus on SUVs, for example, Ford has ceased production of the Focus and Fiesta, the European auto industry seems to be opening the door for Chinese brands to enter the European market with their smaller cheaper EV models.

The newest Chinese EV on the block is the ORA Funky Cat manufactured by GWM ORA, owned by the Great Wall Motors group. With the help of UK distributor International Motors, GWM ORA has recently brought the Funky Cat to the UK market.

EU investigation

During her annual address to the bloc’s parliament, European Commission President Ursula von der Leyen said the global market has been ‘flooded’ with cheap Chinese cars, with China’s share of EVs sold in Europe rising to 8% and possibly reaching 15% in 2025, noting prices are typically 20% below EU-made models.

On September 12th, the European Commission launched an investigation into whether to impose punitive tariffs to protect EU auto manufacturers against cheaper Chinese EV imports it says are benefiting from state subsidies.

The Commission will have up to 13 months to assess whether to impose tariffs above the standard 10% EU rate for cars, possibly rising to the stiff 27.5% level already imposed by the US on Chinese EVs.

Toby Marshall sees such tariffs as simply limiting the consumer who deserves the choice of EVs and should be able to buy whatever car fits their wallet and lifestyle the best.

EV purchasing incentives

A major boost for the sale of BEVs is the various incentives that can be offered to prospective customers including home chargers and cash grants for EVs and chargers. However, such incentives have disappeared in the UK, while other countries including China, Sweden and Norway have generous EV incentives which support the sale of electric cars.

In the UK, regulation is pushing consumers along the path to EVs. But Toby Marshall believes that “incentives are needed to pull demand along the route”.

The government’s drive to net zero through EVs and ultra-low emission zones (ULEZ) is creating a socio-economic impact on the country, causing a divide between those who can afford an electric vehicle and those who cannot.

During the recent House of Lords inquiry into EVs, Auto Trader’s Marc Palmer expressed concerns to the committee that a large number of motorists are being ‘held back’ as a result of price concerns and changes to their lifestyle.

Auto Trader’s Palmer told peers: “There are three core groups being left behind by the transition to EVs: those over 55, women, and people on lower incomes.

“And the core reasons they’re being left behind are around cost, which is a big barrier, perceptions around public charging infrastructure and around the changes required to lifestyle.”

Quality of Chinese brands

Chinese electric vehicles are renowned for their high quality compared to previous Chinese car models and are thus breaking down the brand snobbery that exists in the car industry. Consumers are moving to newer car brands for the enhanced quality and technology they offer, with Tesla breaking the mould.

Toby Marshall noted that, “Electric cars have enabled a shift away from legacy brands in all segments of the market which has and will dramatically change things.”

“People see an electric car as a gadget,” according to Toby Marshall, and the Chinese expertise in EV technology is far advanced of European car brands.

Equipment as standard and the level of outstanding in-car tech plus long warranties (including battery warranty) provides a growing confidence in Chinese EVs and gives them a genuine opportunity to grow in the UK and EU markets.

Sales model for Chinese brands

Most Chinese brands entering the European and UK markets are not looking at the direct agency route and are, instead, focusing on going down a traditional route to market with a dealer model or a hybrid route, incorporating online and dealer presence.

GWM ORA has chosen this omni-channel approach of dealer, online or both for the Funky Cat, which most customers are adopting. Toby Marshall highlights that a significant proportion of EV customers do those stressful car-buying elements online, such as configuring finance, but then go to the retailers to view and drive the car, especially with EVs which are new to most consumers.

The franchise models are essential for EVs, according to Toby Marshall, as they add value and confidence as they are experts in EVs and can amplify the marketing message of the car brand.

The service infrastructure for Chinese EV brands in the UK is still developing, but Marshall notes that International Motors owns a large parts warehouse in the UK for a number of EV brands, and around 30 aftersales points (which is constantly increasing) around the country where Chinese EVs can be repaired, although EVs are known to require less maintenance and repair.


An influx of Chinese EV brands is set to enter the European and UK auto markets in 2023, seducing European car buyers with their low-cost, high-quality EVs and superior in-car technology.

With recent changes in the EV market creating headwinds for electric cars in an increasingly stable market, there is a need for more affordable European models to rival these emerging Chinese EV brands, which are seen as a threat to European automakers.

Analysis from David Betteley Asset Finance Connect's head of content

There are always a lot of moving parts at play in the auto industry. We have seen many changes over the past few years, generally speaking driven by a combination of consumer preference and changing legislation. Take for instance the rush into diesel started by Gordon Brown but now totally discredited due to concerns over air quality.

BEVs are seen as the saviour in this respect as they are zero tailpipe emitters, and whilst there are no national incentives in the UK for the purchase or financing of BEVs at the moment, there are a growing number of examples of penalising ICE and, in particular, diesel vehicles. These include ULEZ in many towns and cities and also a new trend of councils charging more to park a diesel (or in some cases an SUV) when compared to a BEV.

All these developments are promoted as “green” by their respective local authorities, but there is growing evidence to suggest that whilst almost everyone supports green initiatives, this support dries up as soon as the initiative begins to hurt the pocket.

Therefore, it is safe to say that the transition from ICE to BEV is a dilemma for the national government. Low to middle income households are receiving no (national) support to make the transition to more expensive BEVs and, to add insult to injury, these households are having to pay more to use their (in most cased pre 2016) existing diesel vehicles.

There is some evidence that this message is beginning to land. A topical example is the London Mayor submitting to pressure from his local and national party and hastily introducing a means tested scrappage scheme, in an attempt to make the London ULEZ expansion more palatable for voters.

Additionally, Kemi Badenoch (Secretary of State for Business and Trade) is lobbying hard against the 22% rule (22% of production to be emission free) that is due to take effect from January 2024 on the basis that it will destroy investment in the industry and that the targets should either be reduced or extended.

Following the announcement to defer the ban on ICE vehicles to 2035, there will be a further announcement on the ZEV mandate on the 22nd September. It wouldn’t come as a great surprise to see some further watering down of this (also cast in stone) initiative!

However, the issue raised by the deferment of the ban on ICE vehicles is what will happen now to demand for new and used BEVs? With the phasing out date for ICE pushed back, there will be less customer urgency to make the change which may well result in weaker demand from the private sector with the fleet sector hopefully taking up the slack, driven by continuing attractive BiK taxation treatment. The other knock-on effect will likely be a further weakening of RVs on used BEVs which in turn will make them more affordable as a second-hand purchase….so perhaps a silver lining here for customers at the expense of the industry.

So, lots of challenges ahead for the sale of BEVs. One thing is for certain however; at the end of the day, it will be the customers voting with their feet and/or their financial firepower that will decide the winners and losers. The Chinese brands with their combination of wide choice, high quality, class leading tech and competitive pricing would seem to currently hold most of the aces in the pack.

It will be up to Toby Marshall and his colleagues to make sure that they play the strong hand they have been dealt skillfully. And I have no doubt that he will do just that!

European automotive
European equipment

It’s all in the foundations: microservices architecture

In today’s rapidly evolving business landscape, organizations face a multitude of challenges when it comes to addressing threats and opportunities with agility, scaling their operations, adopting new technologies, and delivering value to customers efficiently. Many software architectures pose obstacles to business growth and agility.

In this article, I’ll explain some of the pitfalls that you should watch for when evaluating your technology partners’ software architecture.

The original architecture is the monolith. Characterized by tightly coupled components that are compiled and deployed together, the monolithic architecture is considered a closed architecture that is expensive to scale and modify.

Monolithic architecture has been used for decades, dating back to some of the earliest commercial software. While products with this architecture are relatively simple to install and operate, their architecture often hinders scalability and agile delivery of new functionality. In an era when most commercial software was hosted by customers in their own data centers (on premise installations), monoliths were common because they required less administration from the IT team. However, they have limited options for scaling and use their hardware inefficiently, requiring more IT infrastructure to run at scale.

As they grow in complexity, they require exponentially higher amounts of development and testing to make changes, which impedes agility. Monoliths typically have limited integration options. While they may offer APIs or file-based integration points, their tightly-coupled nature often leads to difficulty in providing clean interfaces for external integration. These issues often yield high hosting costs, delayed product releases, limited integration into customers’ ecosystems and missed opportunities to capitalize on emerging market demands.

Other popular architectures that have been used for commercial software include layered (or tiered) architectures and service-oriented architectures (SOA). These architectures became popular in the 1990s and 2000s. Compared to monoliths, layered architectures improve scaling and code maintenance. They usually separate into 2-3 tiers, and each tier is usually hosted on separate servers, which allows IT teams to optimize each server specifically for its job. Some layered architectures support horizontal scaling, allowing the IT team to add servers to share the load for any of the application’s tiers.

Service-oriented architectures take this a step further and allow specific functions or services to run independent of each other. When designed well, each of these services can be maintained and scaled independent of the others, which improves the system’s overall agility and scalability. The cost of getting these benefits comes with the added complexity for the IT team, who now has more components and servers to maintain. While these architectures reduce the impediments for customers to scale and adapt, the improvements are small compared to more modern architectures.

Two architectures that have become popular in more recent years are low-code and microservice architectures. Low-code architectures are meant to provide extremely agile change by taking the vendor out of the process. While this can sometimes work, they sometimes lack the ability to scale and to remain agile as they become more complex over time.

Low-code applications provide means for customers to essentially develop their own custom application on the vendor’s platform without using traditional software code. Instead, they use drag-and-drop visual tools, rules and simple domain-specific languages to customize the platform for the customer’s needs. This usually allows the customer to quickly adapt the product to meet changing needs. However, it is common for these changes to have a negative impact on scalability and performance because low-code tools don’t offer the same level of support for managing these more technical features of a product. Also, complex configurations on these platforms tend to become difficult to maintain.

At a basic level, ‘low-code’ is still code and these platforms tend to lack the sophisticated capabilities needed to maintain many layers of dependencies and changes that occur during the life of the product. For some, difficulties in maintenance can even show up during the system’s initial implementation.

Many of the challenges noted above with monolithic, layered, SOA and low-code architectures can be overcome with a well-designed microservice architecture. A well-planned microservices architecture means that the technology provider develops and tailors independently deployable microservices to serve specific business capabilities, promoting modularity and decoupling between components. This modular approach facilitates the development and integration of new technologies and functionality, as each microservice can be developed, tested, and deployed independently.

Microservice architectures are inherently open because each service communicates with the others through APIs, and these APIs can provide integration points with the customer’s ecosystem.

Microservice architectures go hand-in-hand with software-as-a-service (SaaS) in the cloud. They make it possible to take advantage of the extreme scalability of the cloud. Usually, each service is set up to ‘autoscale’ (automatically scale horizontally with the load placed on it).

When managed in the cloud by a SaaS provider, the deployment, monitoring, scaling and upgrading of microservices can be automated. This allows the partner to seamlessly deploy updates without taking the system down. This approach is used by many of the technology platforms that we all use on a regular basis, including search engines like Google, media platforms like Spotify and Netflix and social media platforms like LinkedIn and Facebook. These platforms are continuously upgraded and improved, and we almost never experience downtime or other negative consequences.

Through a reliable and innovation-minded technology partner, secured finance providers will be able to capitalize on the latest architectures, tools, frameworks, and technologies for specific services without being constrained by the limitations of the monolith and other dated architectures. This technical flexibility enables secured finance lenders to capitalize on emerging technologies and stay ahead of the competition, whilst offering their customers tailored solutions which fully meet their requirements and needs.

At Solifi, we have taken the microservice approach. We have found that this architecture allows us to provide the agility, scalability, quality and efficiency that our customers require. We have the added benefit of improving our internal development scalability and quality, which we pass on through improved responsiveness and quality to our customers. With the loosely-coupled, independent nature of our services, we can make changes and deploy them safely in minutes and hours instead of weeks and months. The quick response time to market demands positions Solifi as an adaptive and customer-centric organization.

When you evaluate partners for your next technology upgrade, remember to look beyond the functionality provided by the products you evaluate and also consider the ability of the software and partner to enable your company’s growth and agility.

About the author

Eldon Richards joined Solifi’s Executive Team as Chief Technology Officer at the start of 2020, bringing more than 20 years of enterprise software product development and global technology leadership. In this role, Eldon leads the development of the company’s product portfolio, including Solifi’s Open Finance Platform.

Eldon joined Solifi from Recondo Technology, an enterprise SaaS platform providing revenue cycle management for healthcare organizations. As Recondo’s CTO, Eldon was responsible for all aspects of their SaaS technology platform including integration of advanced technologies like machine learning (ML) and natural language processing (NLP). Eldon was a key contributor to the company’s success which led to the acquisition by Waystar. Prior to Recondo, Eldon held executive technology leadership positions at PatientPoint, Optum, and United Health Group.

Eldon holds an undergraduate degree in computer science from the University of Utah, MBA from the University of Minnesota Carlson School of Management, as well as graduate level certificates from Stanford University, Washington University in St. Louis and is a Six Sigma Green Belt.

European automotive
European equipment

AI innovation in financial services


The next big thing in tech – generative artificial intelligence – is promising to change everything from the world economy to our personal lives. The hot topic was discussed in depth in several sessions at the Asset Finance Connect Summer 2023 Conference.

Sulabh Soral, AI Officer at Deloitte said: “At its most basic, AI is software that mimics and generates human behaviour – planning, generating ideas, understanding speech and visuals. Its ability to scale human intellect will have a profound impact.”

Forms of AI in use today include digital assistants, chatbots and machine learning amongst others. As humans and machines collaborate more closely, and AI innovations come out of the research lab and into the mainstream, the transformational possibilities are staggering.

As a source of both huge excitement and apprehension, AI and its limitless potential operates at a superhuman level. While the applications of generative AI are in the early stages, the capacity of these AI models is doubling every three months.

There is huge investment potential in this complex and highly intelligent technology. PwC’s Global Artificial Intelligence Study: Exploiting the AI Revolution describes AI as: “the key source of transformation, disruption and competitive advantage in today’s fast changing economy.”

According to PwC, AI can transform the productivity and GDP potential of the global economy with global GDP rising to 14% higher in 2030 because of the accelerating development and take-up of AI. However, strategic investment in different types of AI technology is needed to make that happen. 

ChatGPT is a generative AI model developed by OpenAI and is at the forefront of this revolution. It is nearly on par with the human brain and it is only getting smarter.

Shaping up to be the most revolutionary technology since the internet, the full implications of generative AI are still untold. This latest innovation in AI will drive an explosive growth and value creation in the technology sector over the next couple of years and vast potential implications for the financial services sector.

Generative AI

The launch of ChatGPT, an example of a Large Language Model (LLM), has sparked an explosion of interest in AI technologies. The development of LLMs allows the access of natural languages, unlocking vast amounts of information, for example, scientific, historical accounts, literature.

Generative AI is not just about linking data and databases but trying to behave like humans to create responses that make sense with, for example, conversation and human-like dialogue; instantaneous responses; and being able to act in a nuanced way with cultural references and adapt to the tone of the conversation.

ChatGPT can be trained to operate within a particular industry knowledge foundation. For example, in retail, AI language models have a number of benefits including accessing a lot of information, interacting in a natural way, assisting with complex data tasks, and solving a number of problems and issues.

New findings from Deloitte’s 2023 Digital Consumer Trends research found that a third of those who have used Generative AI in the UK have done so for work, equating to approximately four million people.

Paul Lee, partner and head of technology, media and telecommunications research at Deloitte commented: “Generative AI has captured the imagination of UK citizens and fuelled discussion among businesses and policymakers. Within just a few months of the launch of the most popular Generative AI tools, one in four people in the UK have already tried out the technology. It is incredibly rare for any emerging technology to achieve these levels of adoption and frequency of usage so rapidly.

“Generative AI technology is, however, still relatively nascent, with user interfaces, regulatory environment, legal status and accuracy still a work in progress. Over the coming months, we are likely to see more investment and development that will address many of these challenges, which could drive further adoption of Generative AI tools.”

Implications for UK businesses

As generative AI further develops, more and more services can become automated. AI can understand mass amounts of data so can reduce the workload of humans, make speedier decisions, and be more personalised.

In the business world, AI can be used in:

  • Customer service – enhance customer service and increase customer loyalty
  • Fraud detection – AI can be used to detect intent
  • Tax service – improve customer service and help file taxes
  • Process optimisation – credit and loan decisioning, process automation, internal document tagging. AI can help accelerate slow application processes, improve loan collectability and user experience, personalised loan collection communication, segment credit users.
  • Improve decision making – in areas such as portfolio management, asset allocation and investment strategy. Roboadvisors are widely touted as one of the highest potential technologies involved in AI in fintech.
  • Regulatory compliance – ensuring transparency and security, anti-money laundering, KYC systems, compliance mentoring.

AI provides the potential to enhance quality, personalisation and consistency, and save time.

In a recent analysis of the potential long-term impact of automation – Will robots really steal our jobs? – PWC determined that almost 30% of UK financial services jobs could be replaced by automation by 2030, offering big gains in productivity and customer experience. However, the report also predicted that the nature of some occupations would change rather than disappear. It added that automation could create more wealth and additional jobs elsewhere in the economy.

PwC’s Global Artificial Intelligence Study: Sizing the Prize highlighted just how big a game changer AI is likely to be, and how much value potential is up for grabs. AI could contribute up to US$15.7 trillion to the global economy in 2030. Of this, US$6.6 trillion is likely to come from increased productivity and US$9.1 trillion is likely to come from consumption-side effects.

According to the study, the adoption of ‘no-human-in-the-loop’ technologies will mean that some posts will inevitably become redundant, but others will be created by the shifts in productivity and consumer demand emanating from AI, and through the value chain of AI itself. In addition to new types of workers who will focus on thinking creatively about how AI can be developed and applied, a new set of personnel will be required to build, maintain, operate, and regulate these emerging technologies.

In the near-term, the biggest potential economic uplift from AI is likely to come from improved productivity. This includes automation of routine tasks, augmenting employees’ capabilities and freeing them up to focus on more stimulating and higher value-adding work.

More and more businesses are turning to automation, investing in AI to replace staff and cut costs. The 2023 McKinsey Global Survey – The state of AI in 2023: Generative AI’s breakout year found that one-third of survey respondents said their organisations are using gen AI regularly in at least one business function and 40% of respondents said their organisations will increase their investment in AI overall because of advances in generative AI.

Recently, telecoms giant BT announced it will be shedding about 10,000 jobs by the end of the decade as it digitises and relies more on AI automation.

However, the ultimate commercial potential of AI is doing things that have never been done before, rather than simply automating or accelerating existing capabilities.

The potential for advances in artificial intelligence will be one of the areas researched at the recently launched Gillmore Centre for Financial Technology at Warwick Business School. The aim of the Centre is to spearhead cutting-edge research and innovation for the UK’s financial and technology sectors, with leading research on AI development and machine learning.

Ram Gopal, Director of the Gillmore Centre for Financial Technology, said: “The Gillmore Centre for Financial Technology will act as a beacon for industry leading research across fields such as AI, blockchain and machine learning, helping to elevate government policy, inform regulators, and guide businesses through the safe development of these areas.”

AI: Not a new concept in the business world

We are seeing a proliferation of AI tools and applications in the business world, including digital assistants, chatbots and machine learning amongst others.

Despite recent advances in generative AI and the explosion of public interest in AI with the launch of ChatGPT, the AI data modelling concept including machine learning and statistical models has been around in UK businesses for many years, developing further since the emergence and development of Cloud technology, a key component for AI allowing it to evolve due to the need to store and process large volumes of data.

AI is already being used by retailers for metrics for pricing, writing advertising copy, and service booking systems, for example.

Fintech Innovator presentations

The Fintech Innovator session at the recent Asset Finance Connect Summer 2023 Conference provided four use cases for artificial intelligence in the auto and equipment finance sectors.

AI in onboarding: In auto finance, AI can use browser behaviour data to predict car brand and buying intent. AI will enable the ability to segment customers by data and enable better customer journeys in a real-time solution.

Currently, there is a revolution in the way cars are being sold which could be enhanced by incorporating AI in all ecommerce platforms.

AI in manual underwriting: AI can be used to predict the outcome of manual underwriting. There are many opportunities and challenges of using AI to progressively automate credit decisions to reduce cost to service and decision times. AI has the power to automate the majority of the manual underwriting process, reducing time, saving costs and enabling growth.

AI in origination: Generative AI solutions based on ChatGPT allows customers to ask detailed questions about their finance contracts. AI can be used as a copilot to take away drudgery and unlock a new wave of productivity, without losing the human element. AI can be used to solve a communication problem across the industry.

AI in retention: AI can be leveraged for enhanced customer retention and OEM success in the auto finance sector, and can be used to optimise the timing and offer for auto finance customers at the end of finance contracts and ability to retain the customer mid-term.

By incorporating AI into various aspects of the customer journey, retailers and financiers can improve customer satisfaction, anticipate and address customer needs, and ultimately enhance customer service and retention.


With the unprecedented growth in AI technologies, it is essential to consider the potential risks and challenges associated with their widespread adoption, for example, security, privacy, bias, hallucinations, and repetition.

A 2023 Forbes article, highlighted the 15 biggest risks of artificial intelligence:

  • Lack of transparency
  • Bias and discrimination
  • Privacy concerns
  • Ethical dilemmas
  • Security risks
  • Concentration of power
  • Dependence on AI
  • Job displacement
  • Economic inequality
  • Legal and regulatory challenges
  • AI arms race
  • Loss of human connection
  • Misinformation and manipulation
  • Unintended consequences
  • Existential risks

The article notes that, “To mitigate these risks, the AI research community needs to actively engage in safety research, collaborate on ethical guidelines, and promote transparency in artificial general intelligence (AGI) development. Ensuring that AGI serves the best interests of humanity and does not pose a threat to our existence is paramount.”

The AI industry is working to solve these problems in a number of ways including focusing on more specialised models, such as BloombergGPTTM. This new large-scale generative AI model is a large language model that has been specifically trained on a wide range of financial data to support a diverse set of natural language processing (NLP) tasks within the financial industry.

Case study: Evolution AI

Evolution AI is using artificial intelligence in the financial services sector to assist with expedient, accurate lending decisions.

Set up in 2015, Evolution AI specialises in intelligent data extraction from business documents. Evolution AI rejected the traditional OCR (optical character recognition) technology as it failed to extract data from a lot of business documentation and is now using modern AI based methods.

Humans are no longer needed to read bank statements and balance sheets or go through business documents for underwriting purposes. Such boring repetitive manual work can now be fulfilled using AI algorithms.

Evolution AI’s CEO Dr Martin Goodson highlighted that you can’t 100% automate a process as you will always need people and human relationships, but you can automate elements of the process to reduce risk and drive efficiency.

Finance provider Novuna Business Finance and specialist commercial lending bank DF Capital both use Evolution AI software to simplify such business processes.

Novuna faced challenges with supplier invoices and extracting information using standard OCR technology. They decided to use Evolution AI software to extract data from business documents but had to address the orchestration of Evolution AI into Novuna’s system.

The successful implementation of Evolution AI’s software has allowed Novuna to extract from even more documents (for example, for sustainability reporting) and to use functionality during other stages of the process, such as with proposals earlier in the process.

Adam Crockford, Senior Change Manager at Novuna Business Finance said, “AI is not a threat but a tool to be used.”

DF Capital use Evolution AI software for the commercial lending side of their business with dealers and manufacturers. Previously DF Capital had to manually extract data from invoices and upload into their core banking platform. However, DF Capital wanted to scale up their business and use more automation going forward.

DF Capital are now taking the Evolution AI solution to the next level and are building API integration between Evolution AI and DF Capital’s core banking platform, linking to pre-existing automation from dealer and manufacturer portals. This allows for processing times to be reduced by 90%, increased even further by straight-through processing, an automatic solution for seamless electronic transactions and interactions without manual intervention.

For DF Capital, taking people on the AI journey with them is as important as bringing in the new automation technology.

Next steps

Artificial intelligence is constantly evolving. The financial services sector is planning to increase their AI investments across infrastructure, model development and deployment over the coming months and years. The industry therefore needs to look at AI use cases using a design thinking approach to enable financial service organisations to respond to this rapidly changing tech environment and to create maximum impact.

Are jobs at risk? This is always asked when a big technological change happens. While artificial intelligence will replace some human jobs as the technology advances, this evolving tech will in turn create new roles and new opportunities. AI can take away a lot of the repetitive drudgery, but it cannot take away all human roles.

With AI technology rapidly advancing, Evolution AI is further developing their use of AI for the future. Evolution AI’s Goodson commented that, in his 20 years in technology, there has never been a time when things have moved so quickly with weekly breakthroughs.

“AI combines excitement with anxiety in a shifting landscape of hands-on exposure to modern AI capabilities. Big changes are afoot,” concluded Goodson.


More than four million people in the UK have used Generative AI for work – Deloitte | Deloitte UK

Will robots really steal our jobs? (

Report – PwC AI Analysis – Sizing the Prize

The state of AI in 2023: Generative AI’s breakout year | McKinsey

The 15 Biggest Risks Of Artificial Intelligence (

Find out whether AI can change everything from the world economy to our personal lives by reading our review of the Asset Finance Connect Summer Conference 2023 Session

Analysis from Dr Martin Goodson CEO of Evolution AI

Perhaps the biggest impact of the rise of generative AI is on the credibility of the big four consultancies’ ability to predict the impact of AI on jobs! Only a few years ago, PwC predicted that education and healthcare were among the industries least likely to be affected by automation. Yet, today, we witness AI models like GPT-4 outperforming humans in medical examinations and chatbots usurping the roles of human tutors. The inconvenient truth is that the redrawing of the future landscape of employment by AI defies neat forecasts.

What is certain is that AI will become an integral part of operations in the commercial lending industry. Its potential for optimising tedious and error-prone business processes is too massive to be ignored. We should embrace this, as it means greater employee and customer satisfaction – and increased productivity.

The adoption process will take time. It’s a long way from a chatbot interface to a complete, well-designed product for the automation of a complex business process such as underwriting. Along the way, it will be important for AI vendors to recognise the importance of developing their AI technology’s capabilities in collaboration with businesses and end users.

Another consideration is the reliability of generative AI in the context of a highly regulated environment like the financial services industry. Generative AI suffers from hallucinations and is subject to bias, meaning that its various outputs – credit scoring models, predictive models, compliance reports and so forth – are less than 100% dependable. Human oversight, therefore, remains an indispensable component.

For businesses eager to leap into automation, the most immediate windfalls lie in the mechanisation of rote tasks: think data extraction from financial documents or reconciliation of invoices. As AI’s role morphs from the theoretical to the practical, the watchwords for industry should be collaboration, caution, and a healthy dose of scepticism about what lies ahead.

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European automotive

Will the UK be ready for the 2030 ban on the manufacture of ICE vehicles?


The UK Government’s decision to ban the manufacturer of ICE (internal combustion engine) vehicles by 2030 and hybrid vehicles by 2035 appears to be set in stone.

With 2030 just seven years away, representatives from the EV (electric vehicle) and charging industries gathered at the Asset Finance Connect Summer 2023 Conference to discuss what the industry must do to be ready for the ban on ICE vehicle manufacturing.

Education to dispel negative EV myths

There is a critical need for education due to the misunderstanding and bad press surrounding EVs. The UK media are doing a terrible job to support the EV sector and transition, highlighting so-called problems such as range anxiety and charging anxiety.

For example, a recent BBC Panorama programme left Andrew Leech, founder and managing director of Fleet Evolution “fuming and frustrated” over the “total distortions about electric vehicles”.

Leech noted, “It was typical sensationalist TV journalism with no preparation, no planning and no thought on how to manage a road route of that length. It seemed its only intention was to paint EVs, and particularly charging them, in a poor light.

“Anyone who regularly drives an EV will tell you that they are much more convenient than ICE models for everyday use, so why do journalists persist in using them for only a few days on trips most would only attempt once a year, with no preparation,” said Leech.

Car manufacturers and their dealers must assume responsibility for informing their customers about the conversion to EVs, including:

Plan your journey – look at your route range and charging facilities along your route. Vehicle range is irrelevant now as it is constantly being extended with improving battery technology.

Home charging – there is an ongoing debate about how many UK households have a driveway with estimates ranging from 20% to 70%, but those with driveways will allow 70%-80% of charging to happen at home. Home charging is a lot cheaper than public charging with many energy providers now offering “smart chargers” that charge your car overnight on the very cheapest tariff available Drivers able to charge at home pay just 5% VAT to power up their EV, compared with 20% for those without access to a driveway or designated private parking space who are reliant on the public network.

Cost – there are a growing number of EVs that are much more price accessible in addition to price reductions and discounts for electric cars. The initial purchase price of an EV might be more expensive than an ICE vehicle, but consumers need to focus on the overall lifetime cost of ownership, e.g. general maintenance is lower and more efficient to run if you can charge from home.

In a recent article – EVs set for major boost in 2023 – Nick Williams, managing director for transport business at Lloyds Banking Group, said: “Directly comparing an EV with its closest ICE equivalent can lead to some misleading conclusions, beginning with the price tag. Although the upfront cost of an EV might in some cases be more expensive, the total cost of ownership is likely to be less, and sometimes significantly so. As well as the obvious savings to be made on fuel, EVs have fewer moving parts and therefore need less maintenance.

“Even in the face of rising electricity prices, the cost argument for switching to an EV, when considered in the round, can be compelling.”

The Green Finance Institute actively engages with lenders about different product offerings for consumers on the EV journey and raising awareness of TCO. There is a perception that making the switch to electric is difficult, so through their financing models, lenders need to make the transition more appealing with product bundles combining EV and home charger.

Have EVs reached price parity with their ICE counterparts?

The initial cost price has always been a major factor in the EV purchase decision, with many consumers believing that an EV is beyond their budget. However, price parity between EVs and ICE vehicles doesn’t require the initial purchase price to be exactly the same.

For EVs, the total cost of ownership (TCO) — the full cost to own and operate the vehicle, accounting for purchase cost, fuel prices, maintenance — needs to become the most important deciding factor for consumers.

Some industry experts believe that TCO for EVs is already lower than its ICE counterpart with price already reaching parity if you consider subsidies in various markets and TCO, according to Deloitte in their Electric Vehicles – setting a course for 2030 report.

Other pluses for EVs also include the fact that EVs’ driving range is already comparable to that of ICE vehicles, and the number of models available is increasing.

Other industry analysts expect TCO parity between EVs and ICE vehicles as soon as 2024 to 2026 for shorter range EVs and 2027 to 2030 for longer range EVs.

Whilst there is a large depreciation gap between the cost of used BEVs and their original purchase price, the price gap of used BEVs is closing with their ICE equivalents if factors such as clean air zone charges are considered.

However, there is still uncertainty around the depreciation of EV residual values. Lauren Pamma, Programme Director at the Green Finance Institute believes that residual values are the big uncertainty surrounding EVs at present, but this is improving with data becoming increasingly available.

Charging infrastructure

In the UK, there is still work to be done on improving public charging networks so that EV drivers have access to infrastructure where it is convenient and at a fair price. Funding and investment models are needed to enable infrastructure at scale to cope with the increasing EV demand.

While charging infrastructure is currently not ready for the ban on the manufacture of ICE vehicles, by 2030 we will be ready as we still have seven years to prepare, according to Charlie Cook, CEO of RightCharge who sees solutions to the challenges.

We are constantly seeing new and improved solutions in technology, software and charging infrastructure, and as we approach the ban deadline there will be more and more investment.

In 2023 ChargeUK, a new trade body for the EV charging industry, was launched bringing together 18 of the country’s largest charge point installers, which collectively will invest more than £6 billion installing and operating new EV charging infrastructure by 2030.

Tens of thousands of new chargers are due to be installed this year, with the aim of doubling the size of the network through 2023.

ChargeUK will work collaboratively with the government and other stakeholders to help drive charge point investment and delivery, including shaping policies and regulation.

In July 2023, the UK Government published new regulations for public charge points, outlined in the Public Charge Point Regulations 2023, including a 99% reliability standard for rapid charge points.

The Public Charge Point Regulations aim to improve the charging experience for electric vehicle (EV) drivers in four key areas: payments, pricing, data and reliability:

  • Government is mandating contactless payments and payment roaming to reduce the number of apps.
  • Charge point operators will be required to be transparent about their pricing.
  • All public chargers will have to provide charge point information and data including live availability data.
  • New regulations include a 99% reliability standard for rapid charge points to build public confidence.

Charging issues also focus on the supply of power from the National Grid, with media reports raising concerns over whether there is enough power to fuel the increasing EV demand.

While National Grid are not worried about the demand from EVs, drivers need to be educated in off-peak smart charging overnight when it is most economical and uses cleaner energy.

Ben Boutcher-West, Chief Digital Officer at Connected Kerb noted that with the flexibility of electricity you can shift around charging behaviour with the use of software models: “the power supply is not a problem if technology can shift and provide those services to offer a blend of different charging options at different times.”

Battery manufacturing

The main cost of an electric vehicle is the battery, making up 55%-60% of the total cost. EV batteries are evolving with changing components and updated software and technology, all helping to reduce the cost.

However, negative media coverage about the quality and life of EV batteries has resulted in many retailers postponing their decision to purchase an EV, instead choosing to wait until there is more data about EV batteries. However, as Lauren Pamma, passionately declared, “we don’t have time, we need to make the change now!”

To meet the demand for EVs by 2030, the UK currently lags behind and needs to urgently invest in battery manufacturing and the supply chain, with only one small-scale battery plant currently up and running.

The global shift to electrification and EVs, in particular, to decarbonise the transport sector is creating a huge investment opportunity to meet the rapid increase in demand for batteries in the UK, according to the Green Finance Institute’s Guide to Investing in the EV Battery Supply Chain.

The new report discloses how the EV transition has the potential to grow the automotive battery market to GBP 12 billion in the UK as early as 2025, with growing battery supply chain capacity – upstream, midstream, downstream and end of life – presenting a significant opportunity for a wide range of investors across the financial spectrum, both those familiar with, and those new to the sector.

The UK has a window of opportunity to play a key role in the transition and grow its current battery manufacturing pipeline. Increasing investor understanding of the sector quickly is critical to seize this opportunity.

Concluding remarks

With only seven years until the 2030 ban on the manufacture of ICE vehicles, a lot still needs to be done to ensure that the UK is ready for the next step in the transition to electrification.

Investment is needed in charging infrastructure as well as UK battery manufacturing plants and supply chains as we move closer to the deadline.

Education of all parties is a necessity in the electrification transition of vehicles. Retailers need to be educated in the benefits of EVs and dispel some of the myths arising from negative media attention, for example, range and charging anxiety. Lenders too need to learn about different product offerings for EVs, while investment companies must see the potential for investing in battery and EV manufacturing in the UK.

Find out whether the UK will be ready for the 2030 ban on the manufacture of ICE vehicles by reading our review of the Asset Finance Connect Summer Conference 2023 Session

Analysis from David Betteley Asset Finance Connect's head of content

The transition to BEVs comes at a time when there are, in addition, a lot of moving parts at play in the automotive industry, such as agency, changes in regulation (new consumer duty), new mobility products such as subscription, the re-birth of old products such as rental, and the advent of the connected car. Connected cars offer the opportunity to completely change the pricing model once and for all from ownership to usership.

Whilst a connected car can be petrol, diesel or BEV, the question I think is whether the electric car revolution is the catalyst for the acceleration of the connected car and the use of the data produced by the vehicle to drive new finance products and usage-based pricing models.

There was much talk at the session about price parity between ICE and BEV and whether it will become a reality sooner rather than later. Parity has come quickly to some markets, but this has been due to the high level of subsidies for BEVs and this (as in the UK’s case) cannot continue forever. I must admit to being sceptical about some of the more bullish predictions about price parity, however, there can be no doubt that as the price per Kwh of electricity goes down, the appeal of BEVs will go up.

The winners in the ICE to BEV race will be those people that can charge from home, and whilst there is an ongoing debate about how many UK households have a driveway, the fact is that if you are a low to middle earner then you are more likely to live in accommodation that doesn’t have a driveway and will be forced to rely more (relatively speaking) on public charging which in many cases can be double the cost of home charging. In addition, if you are a low to middle income earner, you are more likely to be driving an older car that will incur high tolls to drive to work in a ULEZ.

Therefore, there is an element (as usual) of unintended consequence in that the drive to ban ICE vehicles will favour the better off! This could be offset by some kind of means tested incentive, but we will have to wait and see if the government (of whatever persuasion) wakes up to the social divide they are creating.

Continuing on the theme of charging, there is no doubt that the previous discussions about range anxiety have now been replaced by charging anxiety. The strong feeling of the panel was that charging anxiety has been over-blown by the media and that with education and a bit of route pre-planning there will be enough juice in the national grid and enough chargers (both public and private) to deliver it by the time 2030 comes around.

In conclusion, may I turn to the elephant in the room…..there always is one! This particular elephant is the loss of fuel duty and VAT on petrol and diesel and how HMRC will recover that loss. The favoured solution is road pricing, but this is unpopular with Brits who resent paying tolls. Road pricing today is a relatively simple solution to implement, supported by the “connected car” and the ability to re-price enabled by the data feed from the vehicle. This could of course impact the TCO of an electric car, but by 2030 the customer will have no alternative!

Register now for future related webcasts
European automotive

Green assets: Financing is ready, but infrastructure is falling behind

In association with Leaseurope and Eurofinas


The Asset Finance Connect ESG Unconference brought sustainability representatives from independent lenders and captives together to discuss the emerging opportunities and challenges facing the industry as we transition to net zero.

Asset Finance Connect’s head of content, David Betteley, moderated a session focused on the uncertainties confronting the ‘green’ asset finance industry – new risks, new technologies and residual value challenges, asking the questions: What is a green asset? Who is best placed to deal with these changes – captives or independents? Is regulation the driving force behind this transition?

What is a green asset?

Defining a green-renewable energy asset isn’t easy! When you think of green assets, most people think of traditional renewable energy assets such as solar panels and wind turbines for reducing carbon emissions. However, these assets are evolving with the greenwashing agenda and now must include the accompanying infrastructure.

Many participants highlighted the shift in green assets over the last four to five years with regulation playing a role in how green an asset is with Scope 3 reporting focused on the supply chain.

There is a growing concern about the cost of going green, especially at the shareholder level, and the associated risk, increasing and inconsistent regulation, and new technologies.

There is an additional risk from a traditional asset financiers’ perspective as some renewable energy assets wouldn’t pass the traditional funding test to assess the suitability for financing secured on an asset.

With changing technology, such as fibre optic cables and battery storage units, assets that can be collaterised are now different to those in the past. Many green assets are static and would therefore fail the identifiable, repossessable and resaleable test, which is seen as risky for finance companies even though these assets can still represent satisfactory collateral.

There should be no risk and no issue with funding such static key assets that are pivotal to the client. As the world is changing and what you can collateralise is changing, a new industry mindset is needed to look at “behavioural collateral”.

Some participants believe that returns on investments in green assets are cyclical and unstable. Changing regulation results in some green assets no longer being ‘green’ within one to two years, leading to an unsteady and volatile return on green investments.


Circularity has been driven by regulatory guidelines, with people and businesses being forced down the green route because of regulation, was the overwhelming feeling from unconference participants. Regulation has developed over the past 4-5 years and is rigorous over what is deemed to be ‘green’.

It was noted that the impact of regulation on the green agenda is substantial, while the differences around the world with differing net zero dates in various regions create much confusion. This has led to difficulties for global manufacturers who are facing different net zero target dates in different countries. However, one thing is similar in that regulation is evolving everywhere, with governments changing the rules but giving the industry very little notice.

The introduction of Scope 3 reporting has also caused difficulties for the industry, especially when measuring an asset’s CO2 footprint in the supply chain. Many companies are at a loss as to whether they are measuring and accounting for carbon emissions in the correct way.

It was felt that there is a need to study regulation so that everyone can work towards the right solutions. There needs to be consistency in regulation in the long term, to avoid the massive distorting impact of current changing rules.


We are entering a ‘new world’ which requires a mindset change over what is risk and what can be used as collateral to minimise that risk. New financing models and new green assets are causing uncertainties for the industry surrounding new risks – additional credit risk, usage and performance risk, compliance risk in the regulated market, risk to portfolios, new technologies and residual value (RV) uncertainty.

Finance companies see increased risk when entering into long-term contracts for green assets that look good today but could be redundant within five years. Rather than take this risk alone, finance companies are increasingly looking to partnerships and governments for support.

Business models such as ‘equipment-as-a-service’ and ‘pay-per-use’ models bring with them usage and performance risk, added risk for OEMs to understand and manage. Partnering with specialists in the implementation of pay-per-use solutions such as Findustrial can help manufacturers to develop usage-based and future-oriented business models using data-driven platforms to help OEMs embrace these new solutions.

Green assets tend to have a long lifecycle and this increased usage can affect asset valuations leading to more risk. The RV risk is being pushed from OEMs to financiers who don’t fully understand performance risk. Funders generally do not understand assets and the way they work and, until that changes, the market will move to asset managers in the middle of the life cycle who can exploit the ‘new world’ market as they truly understand the asset and its use.

Lack of infrastructure

It was unanimously felt by unconference participants that the industry is backing the transition to net zero with liquidity being added to the green agenda – but unfortunately the infrastructure is simply not there.

For example, the use of hydrogen as an alternative energy source was discussed during the session, but again the infrastructure is challenging with investment needed for infrastructure to bring the overall cost down for the customer.

Technology, assets and financing products are all geared around environmental issues, but there are many questions surrounding the infrastructure: How will it be financed? Who takes responsibility for the infrastructure?

Many industry participants feel that government agencies need to be involved in the funding of infrastructure. However, when we look at the first petrol stations, it was not governments, but private energy providers who financed the forecourt infrastructure.

Collaboration is needed between governments, energy providers and corporates to solve the issue. Once you have volume and scale, the infrastructure will come and be a massive funding opportunity for the industry.


Unconference delegates discussed the importance of ecosystem partnerships with manufacturers, lenders, start-up companies and government agencies sharing the risk and cost of green assets and their much-needed infrastructure.

Orchestrating a range of partnership arrangements will enable customers to mitigate the cost and risk of transitioning to green assets.

Usage-based and servitization models are front and centre with customers, but there needs to be a focus on providing money while liaising with partners for these new models.

Whilst banks have expertise in assets, RVs and credit risk at the beginning and end of the asset’s life, when focusing on the circular economy there is a big gap when it comes to the middle of the asset’s life. Bank asset teams are not well placed to look at usage and servitization as it is not credit risk. Therefore, they need to partner with asset management teams who really understand the whole lifecycle of the asset: “Supporting an asset manager in the green agenda is critical”.

It was also noted that the industry needs to deepen manufacturer relationships and enter into risk sharing or buy-back agreements in order to allow proper risk-taking on new assets.

Lenders need to get smart enough to assess which manufacturers have the right technology to make it past the first wave of consolidation that will inevitably occur in the coming two to three years. Knowledge needs to expand beyond a simple financial analysis with a need for lenders to develop the acumen to go beyond the numbers and get comfortable with the long-term potential of start-up players in the transition.

Captives v independents

The unconference session reignited an on-going discussion about the differing challenges and opportunities for captives vs independents in the transition to net zero.

Large bank independents are suffering from internal inertia and therefore not using their balance-sheet strength to maximum advantage. One non-captive lender noted that independents are falling behind captives in terms of the level of technology but are more sophisticated in terms of products.

It was highlighted that there is now a better appreciation of purpose-based decisions and independent bank lenders are now addressing the right thing to do. Banking is changing, it has a role in society and needs to make a change.

By releasing the inertia from the past, one independent lender noted that they are now able to be more creative and see servitization as a way of moving forward and partnering with others, with a key objective to explore emerging service providers and provide funding.

Risk and opportunities for captives are quite different than those faced by independents. When it comes to risk, independents can choose risk and make decisions, while captives do not have these options – they have to support their manufacturers and cannot choose risk.

Unlike manufacturers and captives, independents are not experienced with the circular economy and the whole life cycle of an asset, with expertise purely at the beginning and end of the asset’s life.

Independent lenders need to build relationships with partners when it comes to circularity and financing an asset for more than one life, and where there is uncertainty around the RV of the asset.

Captives, on the other hand, are willing to promote the circular economy and optimise the life cycle of the asset. They have the ability to refurbish and recondition end-of-initial-life goods and re-sell them within a closed OEM/captive/customer marketplace.

Captives see that while they are in a privileged position due to their tight OEM-parent relationships, they cannot do it all by themselves as they can’t possibly have enough risk appetite to cover all the transition needs. There will come a point where they get maxed out with individual customers or with certain asset types. OEMs need to become open to entering into risk-sharing relationships and partnerships with non-captives as well.

Concluding remarks

The takeaways from the session undeniably focus on the lack of infrastructure and investment in infrastructure. While the financing opportunities are in place, the investment in infrastructure is falling behind and affecting the investment in green assets.

The impact of regulation on the green agenda was addressed with the participants highlighting that regulation is constantly changing and is inconsistent on a global scale. There is a need for consistency in regulation as it can be seen as the driving force in the transition to net zero.

A need for increased collaboration and partnerships between lenders, manufacturers, governments, start-up companies and pay-per-use specialists was noted to spread the increasing risk and cost, and to better understand new business models, new risks, RV uncertainty and new technological challenges.

Find out about green assets and who is best placed to deal with the changes as we transition to net zero by reading the review of our Asset Finance Connect Unconference
European automotive

Vision for the future: how Arval plans to thrive in a changing market


In Asset Finance Connect’s recent webcast, in association with Leaseurope and Eurofinas, Arval’s Deputy CEO and Chief Commercial Officer, Bart Beckers, shared his vision for Arval’s future in a changing and challenging market.

In BNP Paribas Group’s 2022 full-year results, it was reported that Arval had expanded its global leased fleet by 8.3%, including acquisitions, growing the fleet to over 1.6 million. Globally Arval leased around 300,000 electrified vehicles by the end of 2022, four times the amount compared to 2019. And two successful acquisitions in 2022 of Terberg Business Lease Group and BCR Group have helped to expand Arval’s fleet.

Expanding fleet businesses

With acquisitions aplenty in the fleet industry, vehicle fleet businesses are simply getting bigger, with the merger of ALD and Leaseplan scheduled for 2023 creating a combined fleet of 3.5 million units, Arval with 1.6 million units and partner company Element within the Element Arval Global Alliance with more than 4 million units, as a whole. In addition, from a BNP Paribas standpoint, millions of vehicles are financed (including Arval’s fleet).

With fleet numbers and operator sizes expanding, more cars are needed each year presenting greater challenges for large fleet operators to source the cars they need during times of supply issues. As Bart Beckers notes, “this is a challenge but not a new challenge.”

“Getting the required cars while facing supply issues is a challenge, but not a new challenge.”

Beckers believes that size does indeed matter in the fleet industry but not just on a global scale. On a local scale, fleet operators can work with local clients and partners, while on a global scale they are able to invest in solid IT and digital suites to further leverage this scale and invest or indeed acquire competitors and partners.

A significant strategic partnership can be found with BNP Paribas’ partnership with Jaguar Land Rover (JLR), where the power of a bank can make a real difference to the scale of a business. With Arval joining up with their BNP Paribas colleagues in personal finance and automotive retail, BNP Paribas Group can offer a full suite of possibilities in a seamless one-stop-shop environment with a digital suite that is built for those specific needs. Different BNP Paribas divisions can therefore be used by the partner, such as JLR, for different needs. Such an operation has been deployed in nine geographies at the beginning of 2023 with BNP Paribas Group optimistic about how it will make a difference to the market.

While many vehicle leasing companies are merging their retail and fleet divisions, Beckers does not see this as an additional problem but rather a growth opportunity. Out of Arval’s 1.6 million vehicles, more than 1 million are still in the corporate sector and the rest is other business including retail, where private leases are a growing segment in many countries and the domain where Arval are competing head-on with manufacturers.

Transition to BEVs

Bart Beckers believes that price matters in any industry and particularly in the auto industry with the transitions to electric vehicles. Price is always an important issue, whether it is a private individual or large company.

“Price is always an important issue in the auto industry, whether it is a private individual or large company.”

To see the benefits of electrification, fleet managers need to adopt the TCO (total cost of ownership) method for analysing fleet cost and the TCM (total cost of mobility) approach, if they start using other forms of mobility, rather than using a monthly rental approach.

Larger companies are now driven just as much by their CSR and ESG agendas as TCO. And they also need to keep their own employees satisfied with the company car being used as a loyalty instrument. Charging infrastructure is extremely important too and must be affordable, with energy networks and energy pricing following suit.

Arval is concerned that cars are becoming less and less affordable. Bart believes that it is important that everyone (and not just the well off) can afford a car.

New entrants within the OEMs are bringing more accessible vehicles and prices to the global market, and Beckers believes that this should be embraced.

ESG and CSR are now seen as big drivers in the fleet business with large multinational companies in mature local markets willing to pay a premium for the environmental option. As Beckers confirms, “ESG is extremely important and growing in importance with large multinationals” as it is one way to really make a difference.

Often this is combined with fiscal incentives, with large corporate accounts pushing forward with governments’ efforts. Bart believes that fleet companies and governments must help as “we owe this to the environment as an industry… and Arval wants to play a role.”

Arval is taking a leading role in the net zero transition with feedback from Arval Mobility Observatory Fleet and Mobility Barometer highlighting that in most countries (one in two of the 25 Arval countries) they have already started embracing EVs and, at the end of 2022, Arval’s new order intake over all Arval entities was 35% EVs.

As part of BNP Paribas’ Horizon 25 strategic plan, Arval’s objective is to have 700,000 electrified vehicles in fleet by 2025, of which 350,000 BEVs. At the end of 2022, there were 300,000 electrified vehicles as a result of Arval’s determination and taking calculated risks with residual values (RVs).

However, the results of AFC’s accompanying webcast poll highlight that the main force influencing the selection of fleet BEVs over ICE is price (financial – personal tax advantages), with sustainability coming in second. These results link to a recent Arval Mobility Observatory survey conducted by IPSOS across six different companies who are mature clients of Arval. The study found that price and fiscal benefits were the most important consideration for companies, while electrified vehicles came fifth and environmental considerations unfortunately were tenth in the survey: as Beckers sadly noted, “Price and fiscal benefits are needed to get people on board.”

“Price and fiscal benefits are needed to get people on board the electrification journey.”

Setting residual values

Setting RVs is a difficult job, especially with some fluctuant new model prices and new companies with no heritage, such as Chinese OEMS, entering the global market.

Beckers explains in the video below that, while not an easy job, setting RVs for electric vehicles is Arval’s core competence.

When setting RVs, Arval initially assesses the vehicle and can then influence the price and the possibility of vehicle multi-cycling, with cars being reused two to four times, all contributing to the risk.

New mobility

Arval have an interest in new mobility products with a focus on mid-term rental products, Arval Connect telematics solutions, and products where you pay by the time you have the car.

Arval’s Beckers sees BEVs as indirectly being the catalyst for a whole new suite of customer mobility products. This is linked to changing times following the Covid pandemic with different living and working patterns being adopted. Although we now drive less miles, Beckers points out that we still need cars going forward, especially if we are not based in cities.

With new mobility comes new processes, new platforms and systems, and new people, so is it best to form strategic partnerships in your ecosystems or go it alone which could possibly be the slower option? Arval Beyond – Arval’s strategic plan 2020-25 that was developed before Covid – highlights their way forward in the world of new mobility.

Arval Beyond has four pillars focusing on mobility, electrification, flexibility and connected, and the most important pillar, according to Bart Beckers, partnerships.

Arval Beyond – Arval’s strategic plan 2020-25

360° Mobility: 360° Mobility transforms Arval from a car-centric company into a mobility company. In 2025, 100% of Arval countries will offer alternative and sustainable mobility products or services.
Good for you, good for all: Arval aims to become a key leader in energy transition and sustainability by helping customers to protect the environment and create safer roads. With Good for you, good for all, Arval will have 700,000 electrified vehicles in its fleet by the end of 2025 (including 350,000 BEVs), across all its 30 countries, as well as registering a 35% reduction in its fleet’s average CO2 emissions, and a 10% decrease in its overall accident rate.
Connected & Flexible: Arval is building a simpler and highly connected leasing offer. Based on a combination of new technologies and services, it will enable drivers to enter a new era of mobility with a much simpler driving experience. By 2025, more than 80% of Arval’s fleet will be connected and will offer a wider set of services to make the driver’s life easier.
Arval Inside: Since the creation of Arval in 1989, partnerships have been part of its DNA, starting with banks and car manufacturers, and now extending to other stakeholders. In 2025, 100% of Arval countries will have signed successful partnerships with international or strong local players.

Partnerships are important to Arval; not just distribution partnerships with companies such as JLR but also partnering with fintechs to scale up faster.

One strategic partnership, which has helped Arval to scale up and is complimentary to Arval’s legacy, is RideCell, which deploys next-generation global shared mobility solutions.


When asked which products will emerge as the most important mobility product for the fleet sector by 2025, delegates of the webcast poll unanimously felt that subscription (47%) followed closely by Pay-by-Use (44%) products will be the most prominent mobility solutions in the future.

However, if price is one of the biggest drivers for BEV at the moment, will we see a rise in the premium subscription product, where costs are higher than a regular lease or PCP and not affordable to middle-income customers? Beckers feels that higher subscription costs are the price we pay for more flexibility and an easy-to-understand model which is appreciated from a consumer perspective.

Arval’s Beckers sees us moving into a world of mobility with a combination of subscription and full-service lease/PCP, but not 100% subscription.

The hardest aspect of the subscription model to get right, according to Beckers, is managing utilisation. This challenge is similar to that faced by short-term rental businesses. Going forward, to make subscription a successful mobility solution, customers need to get used to driving different and older cars, while fleet companies need to find ways of gaining higher utilisation from existing fleets. Refurbishment costs also need to be controlled.

Find out more about how Arval plans to thrive in a changing market by reading our review of the Asset Finance Connect Webcast featuring Bart Beckers

Analysis from David Betteley AFC Auto content leader

It was a real privilege to interview Bart Beckers who has enjoyed a long and very successful career in the fleet industry, during which time he has built up an eclectic knowledge of what makes the industry tick. Rather than sitting back and comfortably using that knowledge to maintain business as usual, Bart identified himself as a restless and very forward-looking individual, wanting to use his knowhow and the power of Arval and the BNP Paribas Group to initiate real change in the fleet industry.

Bart acknowledged that there was a continual merging of the traditional fleet and retail automotive markets, but he doesn’t lament that change, rather he sees it as an opportunity to enlarge Arval’s scope of operations, under the global BNP Paribas umbrella of “One Bank Auto”.

A number of factors are helping him to take advantage of the opportunities on offer:

  • Leverage Arval’s inherent ability to deliver in-car driver services using the wide range of telematics-based car derived data.
  • BEVs: Bart acknowledges that they are expensive, but by developing flexible financing models such as pay-by-use and/or short to medium-term rental products, and creative RV setting for lesser known but more affordable brands, they are more easily accessible.
  • Partnership with JLR.
  • Growth of salary sacrifice schemes and the like in various European markets.
  • Increased consumer interest in pay-by-use, subscription and other “new mobility” schemes.
  • Developing partnerships with like-minded Fintechs to provide speed to market for new customer demanded services.

We also talked at length about the elephant in the room for the automotive industry…ESG. Bart discussed his concern that the results of a survey conducted by the Arval Mobility Observatory strongly indicated that customers today are more focused on dealing with their costs increase than other things. Bart and Arval are on a mission to increase electrification of the fleet, and to promote the efficient use of cars by developing new products which reward efficiency.

Register now for future related webcasts
European automotive

Finance first: Customer journeys that drive loyalty and increase spend


The most recent Asset Finance Connect webcast, sponsored by FIS, brought together a wealth of auto industry expertise to discuss the finance first concept that provides pre-financing at the start of the customer journey, and both enables sales and ensures long-term customer loyalty.

Carpass is a business concept that pulls together operations, technology and business processes to engage the customer online for finance at the beginning of the car-buying journey and then provide the necessary technology to support that customer in their buying decision regardless of brand.

When developing this finance first platform, Tony Lynch, owner of, asked the question: ‘as a finance company, what comes first – the car or the finance?’

Lynch believes that all car-buying journeys start online and most of those journeys need finance: “As a finance company we have traditionally been an enabler to the motor company, but we should be the customer acquiror, maybe the finance is that important to the customer that they can be pre-approved online for finance and then we’ll help you buy a car.”

There is an enormous opportunity for captives, such as Toyota Financial Services, to play a much bigger role according to Lynch and Toyota Financial Services’ Martin Muessener. Together, they started to realise that if the captive could pre-finance the customer at the beginning of the car-buying journey, they could potentially influence their car-buying decision towards the captives’ brand.

Martin Muessener pointed out that, since 2017, Toyota Financial Services has been observing customer behaviour in Europe regarding finance first. Since 2017, there has been an increase of 15% of car buyers who would prefer to finance first, providing an increasing opportunity to ‘hook’ in the consumer in the finance first phenomenon.

For captives, finance first is a new way of thinking and involves opening a new channel with finance first and direct to consumer. This will enable them to widen their customer base and loyalise customers. The conquest potential to get the customer to change brands leads to future growth.

Nick Brownrigg, CEO at BMW Financial Services Nederland B.V., highlighted that pre-authorising people for credit is not a new concept, but it must be done in an easy manner for customers who strive for ease of use. Brownrigg believes that digitisation in the car-buying journey is extremely important, as is the marketing effort as you still need to drive people to buy and not just simply visit your website.

David Nield sees the different drivers for finance first or car first depending on the confidence of the consumer being able to access credit. Everyone starts in a different place according to Nield, with sub-prime customers starting from what they can finance. The monthly payment is critical at any stage in the journey for the lender and customer from an affordability point of view.

Nield believes that the customer journey should enable the different starting points for customers depending on their needs, but current models don’t operate smoothly and are not customer oriented. As Nield states, “Customers can fulfil so much more of their journey online, a journey that should be customer first.”

Nick Brownrigg agrees that the car-buying journey should be moved to a single digital channel which should be the channel of the customer’s choice, for example, a mobile app.

Adapting technology

Traditional tech systems are built for car first and then finance, according to FIS’s David Woodroffe. Finance first would turn these systems on their head!

The car-buying journey is no longer a linear journey as it was five to ten years ago, according to Woodroffe. There needs to be a workflow reorientation to bring the finance approval to the start of the process at the front of the system. With pre-approval upfront, Woodroffe believes that we need to lessen the burden on the customer at the front-end to avoid a drop-off of customers having to fill out multiple forms. Information capture needs to be streamlined, using open banking services for affordability checks, dynamic pricing and eIDV (Electronic Identity Verification), in order to minimise the friction upfront.

To address the technical challenges presented with finance first, Woodroffe does not see any major problems that can’t be solved by stitching the journey through APIs – opening platforms and distributing capabilities through APIs. While the tech is available, Woodroffe points out that investment is needed to open and share data in the industry and make it accessible to APIs.

Genpact’s Harvey Maddocks sees the finance first conversation lending itself to artificial intelligence (AI). Amar Rana agrees and sees the future use of machine learning to speed up pre-approval and underwriting. AI could be used to collect the missing data, not to make the decision.

As FIS’s David Woodroffe confirms, “the use of data and machine learning is definitely part of the picture moving forward.”

“AI is going to change every aspect of the car-buying journey”

Tony Lynch

Tony Lynch sees AI as a very powerful tool that will change every aspect of the future car-buying journey. When looking at predictability of buying intent, the most basic form of intent is engagement, and the more the customer is engaged the more likely they are to buy.

Lynch believes that AI chatbots are genius at this type of engagement, answering just as competently as a salesperson: “If the success of finance first is based upon the conclusion of the sale, then the AI chatbot is going to be essential for us being able to scale it, especially across multiple markets and regions.”

Changing landscape

In researching and developing the finance first business processes, Tony Lynch found that customers are online for approximately three months browsing for a car. During this time, Lynch feels that finance companies should embrace the finance first initiative by engaging with the customer to provide information early in the journey and build a beneficial customer profile and loyalty over time.

As Lynch states, “pre-approval creates a level of loyalty which persists throughout the car-buying journey,” with the finance company engaging with the customer on the platform and providing a level of support.

“Financing pre-approval creates a level of loyalty which persists throughout the car buying journey”

Tony Lynch

While finance first is beneficial for the customer, is it attractive for the independent and network dealer channels? Martin Muessener sees a potential issue with independent dealers receiving a pre-approved finance first customer, with the temptation for the dealer to turn the customer to their own financing options.

For network dealers, finance first does the ‘fishing’ on the dealer’s behalf, sending them customer leads that they wouldn’t normally get as they are outside of the dealer channel. Customer credentials and shopping behaviour can be shared with the dealer who can then make predictions on how likely the customer is to buy a car, which has the potential to turn into a brand conquest for the dealer and greater customer loyalty.


Finance first does present some challenges, including financing pre-approval without knowing what car it is being used for. This causes problems with current soft search systems that have an auto proposal system which must include a car.

Looking at financing pre-approval, CrediCar’s Amar Rana is concerned as underwriters will need to account for the fact that no car has been chosen at the initial stage. This causes an added complication, especially in the UK when trying to conform to the new consumer duty guidelines as you cannot give the customer a false sense of pre-approval. Rana points out that initial eligibility checks won’t take the vehicle into account but obviously when final financing approval is given, the vehicle will be added to the equation.

Another issue relates to the uncertainty of what finance product the customer will decide on at the end of the journey, as the type of product taken will change the RV. The tech system needs to be dynamic enough to fulfil the customer experience even if they change fields in the finance package.

Prime or sub-prime?

While finance first appears to present a more attractive option to sub-prime rather than prime customers, sub-prime customers are not necessarily the customers that a captive wants. Captives want the prime customers, but finance first is less attractive to them as generally they already know what they can afford and don’t need to get the finance first.

Martin Muessener sees opportunities for finance first in prime customers, especially those who are undecided about the finance product or car, customers who like to be guided and like the approach of curated sales and a premium trusted online service.

BMW’s Nick Brownrigg sees benefits for both prime and sub-prime customers in finance-first. For prime, it gives more value-added, more options and makes the process easier. For sub-prime it can enable you to get a car, based on what you need and can afford. According to Brownrigg, “if you are enabling a customer to make a purchase they need to make, that is the subprime; if you are adding value to a customer who knows they can already afford it by giving them the options or just by making the process easier, that is a prime customer with a good credit rating.”

However, Brownrigg sees that much of the value that is delivered to customers to generate loyalty comes after the point of purchase, over the next two to three years after they have made the financing purchase.

“If you are enabling a customer to make a purchase they need to make, that is the subprime; if you are adding value to a customer who knows they can already afford it, that is a prime customer”

Nick Brownrigg

Concluding remarks

“Finance first puts the customer in the driving seat,” according to Toyota Financial Services’ Martin Muessener. This direct consumer approach provides increased customer convenience, flexibility and freedom. While there is less of a structured sales process in finance first, for practical reasons there is more of a default approach at the beginning of the journey.

While Tony Lynch also sees benefits in finance first for the consumer, where they can see what they can afford, the monthly payment and likelihood of financing approval before moving along the platform looking at a potential car purchase, he also highlights the opportunities for increased sales and customer loyalty for the finance companies.

“Finance first puts the customer in the driving seat”

Martin Muessener
Find out about the finance first concept that provides pre-financing at the start of the customer journey, enabling sales and ensures long-term customer loyalty by reading our Asset Finance Connect Webcast Summary sponsored by FIS

Analysis from David Betteley AFC Auto content leader

This was indeed an extremely lively debate between people nominally with an auto finance related job-title, but with very different backgrounds and journeys to where they presently sit. As could be expected from such a diverse panel, there was not unanimous agreement about finance first, but this simply added to the debate!

As with many of the topics we present at AFC, there is no right or wrong answer; our job is to continuously monitor market developments and provide thought leadership as to the potential drivers our members and listeners need to be aware of.

Similarly, the survey results were interesting in that there was a wide spread of opinions from the delegates. There is clearly some hesitancy to consider that the majority of cars will be sold on-line anytime soon, so this is good news for our dealer colleagues, who now tune in much more frequently to our webcasts!

There was somewhat more enthusiasm for the growth of finance first, but again the survey results could not be interpreted as a “slam dunk” for this innovation.

There was a good debate about whether this is a sub-prime or prime product, but this was summed up well by Nick Brownrigg who explained that for a sub-prime customer it was about basic access to wheels, whereas for a prime customer the dealer/OEM had the opportunity to provide added value services and ensure long-term client retention.

So, I think the key question here is whether finance first is a finance pre-approval, a lead generation tool, or a customer retention policy.

My thought is that finance first should be thought of not as “pre-approval” but “pre-validation” What’s the difference you may ask. I think that for pre-approval, this sits better with a specific car choice when not only can credit be confirmed but a rate for risk model can be applied also.

Pre-validation is a step back from this and it enables the customer to continue the car buying journey with a greater feeling of security that they have the money in their wallet, that in turn enables the seller of the car to significantly increase the likelihood of conversion, and secure a finance contract even when the customer changes his or her mind about what car to buy, and from where.

A lot of talk about journeys. An old boss of mine had a favourite saying, “every journey starts with a first step,” …and Tony Lynch has started the finance first journey and there is no doubt in my mind that he has the skills, enthusiasm and staying power to complete it. Watch this space!

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European automotive
European equipment

How digital business ecosystems are changing the auto and equipment sectors

The concept of ecosystems originated in the geographical world but has traversed to the business and technological environment. As John Murray, Head of Solution Architecture (EMEA) at Alfa confirmed at the recent AFC Winter Conference, “Ecosystems are an environment with a set of rules and a number of participants who collaborate and compete against each other, where ultimately the overall value of the ecosystem is greater than the sum of its parts.”

Over time and following the pandemic, customers have become increasingly competitive and more demanding over what they expect to see in the marketplace, e.g. self-service applications, 24-7 availability as key requirements. Ecosystems answer these customer demands, with strong software providers offering a variety of components that are put together on a single platform which can be flexible, innovative and can adapt to requirements.

Building a digital ecosystem for asset finance is explored in Alfa’s Digital Directions 3 report, which draws on industry experts’ input to understand a future in which technology’s power is channelled not by individual operators, but by many participants, who collaborate in an ecosystem on delivering new value that exceeds the sum of its parts.

“Ecosystems are an environment with a set of rules and a number of participants who collaborate and compete against each other.”


Application programming interfaces or APIs are crucial to today’s digital economy as they are the foundation of many digital platforms, enabling organisations to build and plug-in new products and solutions in their ecosystems.

Digital Directions 3 emphasises the importance of open APIs as “a cornerstone of modern technology” in the way they simplify the process of connecting applications and enable ordered interaction between them.

For example, Alfa can provide APIs, such as to their credit decisioning engine, and clients can connect to these APIs with their own front-end portal. APIs together create an ecosystem that is incredibly powerful.

John Murray noted how Alfa can create direct links via open APIs to specialist products and services which will enrich their customers’ experience, reduce the need for Alfa to develop every element required in-house, and provide access to innovative fintech solutions.

“The system orchestrator plays a key role in making ecosystems deliver what is intended.”

Role of the orchestrator

The orchestration layer of the digital platform brings together all APIs and components, and is one of the most important aspects of the ecosystem for the customer journey.

As highlighted in Alfa’s Digital Directions 3 report, “The system orchestrator plays a key role in making ecosystems deliver what is intended. They are trusted advisors to their customers, charged with handling the complex data sharing, technology selection and value metrics involved in building an ecosystem. They have an overall picture of all the participants in the network, and an understanding of what new functionality is required, who will supply that requirement, and how risk and reward will be shared.”

An orchestrator could take on an advisory and consultancy role focusing on the customer and what is best for them, looking at what could be added to the platform, and then orchestrate what is the correct and best tool for the job.

With industry expertise and customer experience, a company such as Alfa would be ideally placed as an orchestrator bringing its trusted leadership to the ecosystem, forging successful partnerships, and integrating components to make a successful ecosystem. With Alfa’s industry knowledge, John Murray highlights that they can look at what is already available and put the solutions and products together effectively in a business relationship.

John confirms that as an ecosystem orchestrator, “the key thing is to understand the business benefits alongside the technical options that are available.”

Boston Consulting Group notes that, “Orchestrators are the pivotal players and stand to gain significantly as platform-based ecosystems increase market share and eat into the profits of traditional companies.”

“The key thing is to understand the business benefits alongside the technical options that are available.”

Collaborative partners

Whilst not a new business concept, ecosystems are essentially about choosing the right solutions and products and plugging them into a single platform for a seamless customer journey.

Ecosystems therefore need strong collaborations with partners who have a single focus and can deliver the functionality in a solid way. As John Murray points out, Alfa could build each individual function but this could be time consuming, or they could partner with a trusted company with a good reputation who can provide that functionality quickly. Alfa would help choose the best solution with the most flexibility that could add the most value to the ecosystem, while not necessarily doing much – if any – development work itself.

The key benefits when creating partnerships and ecosystems are twofold: (i) speed and improving time to market, so that customers get the solutions quickly; and (ii) reducing risk.

Ecosystem partnership strategies can generate significant value both by growing the core business and by expanding the portfolio into new products and services.

One such integration partnership with Alfa is Tomorrow’s Journey, whose SaaS platform JRNY is purpose-built for subscription and usage-based mobility, and integrates perfectly with the Alfa Systems platform. Tomorrow’s Journey CEO Chris Kirby said, “the customer’s desire for an enhanced digitalisation to plug gaps in their journeys resulted in a necessity to partner with other specialist brands and provide a seamless customer journey.”

But with so many solutions in an ecosystem, which players – large or small – actually benefit from the partnership? Andrew Martin, Chief Data Officer at CrediCar would like to think that everyone can benefit, with large companies, like Alfa, having the flexibility to plug in new technologies and leverage advancements that they can’t or don’t have time to build in-house, while smaller companies can focus on new solutions and technologies and then interface with big players who can plug in their packaged-up solution to the ecosystem.

There are also advantages for business customers who get the benefit of all these varying solutions and products being brought to them on one platform in a seamless journey.

“Ecosystem partnership strategies can generate significant value both by growing the core business and by expanding the portfolio into new products and services.”

Partnership risk

Digital business ecosystems present a number of potential pitfalls as well as opportunities. Working with smaller fintechs, who often need to generate new funding, can be seen as a risk for bigger players in case they suddenly disappear and there is a gap in the platform.

John Murray highlights that companies such as Alfa will ensure that they only collaborate with trusted partners with a successful track record, to ensure that their customer won’t be affected, with any risk being looked at from a business sense (a need to mitigate risk through procurement and due diligence of new partners) and a technological one (cloud offerings have resiliency built in which provides strong backing).

There is also an element of risk for smaller companies who partner with large companies in the ecosystem, as a large player could decide to build the third-party functionality themselves or replace it with a better solution. The use of APIs in a software platform built of many components allows the easy replacement of an individual component when a better one becomes available, making it easier and faster for platforms to evolve and develop.

Alfa’s John Murray points out that major companies like Alfa prefer to focus on the customer and customer journey when providing them with the partner’s functionality. They like to interact with smaller specialised companies as the more ecosystems they can be part of, the stronger the overall solution will be. If they were to create each solution internally, the time to market would be too long so it makes sense to partner with specialists.

Large tech companies no longer have to be seen as a one-stop-shop, and they present the opportunity to plug-in specialised flexible solutions which help to adapt to new customer requirements. In turn, small companies can be integrated to many different ecosystems creating a stronger offering.

Another risk could be identified when smaller companies move between the ecosystems of more than one big player. However, John Murray confirmed that Alfa is happy for their partners to be part of many ecosystems as it makes them stronger. The downside to being exclusive to one ecosystem is that you can only move as fast as that one system, so working with a large number of players allows the smaller company to be functionally stronger and have a wider awareness with new visions from different markets.

“Large tech companies are no longer seen as a one-stop-shop; they present the opportunity to plug-in specialised flexible solutions which help to adapt to new customer requirements.”

For more information on building digital ecosystems in asset finance, download Alfa’s Digital Directions 3 report, which offers insight into the emerging role of technology providers as ecosystems orchestrators, identify various types of ecosystems, and discuss the current opportunities to deploy them in order to meet the needs of the auto and equipment finance industry.

Find out how digital business ecosystems are changing the auto and equipment sectors by watching our Asset Finance Connect Conference Session

Analysis from Andrew Flegg CTO, Alfa Systems

One of the key goals for many of today’s customers and providers is to embed all technology using APIs in a wider digital ecosystem.

Open APIs are a cornerstone of modern technology which simplify the process of connecting applications, and enable ordered interaction between them. Granular, well designed APIs empower organisations to build ever-greater value for their users in less time, and with less investment, than has been possible in the past.

A digital business ecosystem provides cutting-edge capabilities and can be developed by the provider, its clients, or specialist third parties that deliver anything, from state-of-the-art digital engagement channels to innovative, usage-based products.

Finance providers are recognising the opportunities to create new forms of value through partnerships, and collaborating via shared data such as telematics, causing ecosystems to become increasingly popular.

As more participants collaborate, they begin to create a community with a common purpose, which can work together to tackle challenges. Further to this, entire platforms and applications can be fully integrated to deliver new business solutions.

The vision for an open digital platform such as Alfa Systems is to empower customers to leverage the power of these connected ecosystems, which could be through receiving telematics or credit data, or introducing new products or origination channels.

Growing economic pressures, combined with the prospect of businesses facing increased strain on budgets and investments, represent an argument for collaborating with other providers and forming partnerships. These alliances can offer the customer a complete, seamless journey in one ecosystem of specialist modules.

Alfa is therefore exploring more integration partnerships, to satisfy the future needs of the industry, while opening up possibilities for our customers and showing them what is available in our growing ecosystem. Through such collaboration, Alfa can introduce customers to specialist ‘out-of-the-box’ applications in a central ecosystem, providing a managed solution that will save them from having to embark on that journey themselves.

Entitled Building a digital ecosystem for asset finance, Alfa’s Digital Directions 3 Report draws on industry experts’ input to understand a future in which technology’s power is channelled not by individual operators, but by many participants, who collaborate on delivering new value that exceeds the sum of its parts.

In the report, Alfa offers insight into the emerging role of technology providers as ecosystem orchestrators, identifies various types of ecosystems, and discusses the current opportunities to deploy them in order to meet the needs of the auto and equipment finance industry.

Download the Digital Directions 3 Report

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European automotive

The transition to Mobilize: can new mobility finance products deliver a profitable and sustainable future?


Auto companies are increasingly moving away from the traditional car ownership model to more climate-friendly mobility offerings linked to a company’s sustainability strategies. In a recent session at the AFC Winter Conference, the CEO of Mobilize Financial Services UK, Alice Altemaire, and Asset Finance Connect’s auto finance community leader David Betteley discussed the battle of planet versus profit in the motor finance industry and whether car companies have to sacrifice profitable returns for sustainable strategies or is there a way to have both?

Roadmap to green

Many auto and asset finance businesses have a ‘roadmap to green’ highlighting four steps towards large-scale green asset finance:

  1. Leasing ‘green’ assets using a conventional leasing model.
  2. Circular economy options added to the conventional leasing model (e.g. recycling, asset rotation, asset sharing).
  3. Flexible ‘as a service’ solutions for largest customers through manufacturer risk-sharing partnerships.
  4. New funding models (e.g. Solvency II reforms, securitisation, green bonds) to facilitate scaling up of new models.

The right level of regulation is required to support, embrace and enable sustainable innovation. Regulators believe that all businesses need to look at their emissions and how they can be reduced, e.g. work with logistics and suppliers in the value chain who must all work towards net zero. From 2019, large UK companies must report their emissions, try to be more efficient and support sustainability.

Scope 1, 2 and 3 emissions

In order to monitor the carbon emissions of the business world, Scope 1, 2 and 3 emissions reporting is now in place:

  • Scope 1 emissions – direct emissions from owned or controlled sources, e.g. fuel used, air, and business car travel
  • Scope 2 emissions – indirect emissions from the generation of purchased energy e.g. Electricity purchased for use in offices
  • Scope 3 emissions– all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions, e.g. emissions from products used by the company’s customers

As Scope 3 emissions usually account for more than 70 percent of a business’ carbon footprint, it is crucial that companies tackle these emissions to meet the aims of the Paris Agreement and limit global warming to 1.5°C. However, measuring Scope 3 emissions is a challenge.

There are numerous benefits associated with measuring and reducing Scope 3 emissions, where organisations can:

  • assess where the emission hotspots are in their value chain;
  • identify resource and energy risks in their supply chain;
  • identify which suppliers are leaders and which are laggards in terms of their sustainability performance;
  • identify energy efficiency and cost reduction opportunities in their value chain;
  • engage suppliers and assist them to implement sustainability initiatives;
  • improve the energy efficiency of their products; and
  • positively engage with employees to reduce emissions from business travel and employee commuting.

While companies are now recognising the importance of addressing their Scope 3 emissions, action in this area must be scaled up to reach true net zero by 2050.

Mobilize Financial Services started their sustainability journey in 2019 when they subscribed to the SME Climate Hub with a commitment of decreasing their emissions by 50% by 2030 but also to be net zero.

Mobilize successfully monitor their carbon emissions in Scope 1, 2 and 3 and have effectively and efficiently reduced their carbon emissions as well as supporting and influencing their customers and suppliers to be more sustainable.

As Alice Altemaire highlights, changes to reduce Scope 1 and 2 emissions are easy to implement:

  • Scope 1: business mileage and emissions – Mobilize have moved to BEVs, with incentive schemes for employers for EVs and chargers.
  • Scope 2: office premises and utilities – Mobilize have switched electricity to recycled electricity and energy-saving options at their premises (e.g. solar panels). Alice Altemaire points out that while it is easy to spot problems here, it can be difficult to rectify if the building is leased. However, recent contracts have added a clause whereby premises must be net zero. This ease of transition is further reinforced by Vertu CEO Robert Forrester who highlighted in a recent interview that 50% of Vertu’s power will aim to be off grid in the next 12 months, from LED lighting and solar panels.
  • Scope 3: seen as the “most challenging” of the reporting emissions as it is the reporting of the emissions of customers and suppliers. Alice Altemaire believes that businesses must try to influence and support their value chains suppliers to be more sustainable.

Mobilize is aware of reducing their carbon emissions and have invested in Scope 1 and 2 reporting. With this small amount of investment, Mobilize have been able to reduce their emissions and in turn significantly reduce their costs.

With rising energy costs, there is more motivation to save energy which equates to saving money, thus demonstrating that being more efficient leads to costs savings which benefits the business and the planet. Alice Altemaire is a strong advocate that saving the planet ultimately leads to saving money and increased profit: “saving on emissions is saving money and saving costs.”

“Saving the planet is also saving money so there is no excuse not to look at reducing emissions.”

Alice Altemaire

When discussing the emissions of Mobilize’s portfolio, Alice Altemaire highlighted that more emissions are produced in manufacturing electric vehicles (EVs) than ICE cars as the electric vehicle (EV) batteries are being shipped from Asia. Therefore, as Alice notes there is an urgent need to work with the manufacturer to localise battery products and car components to Europe.

Refurbishment and the circular economy

Alice Altemaire is very passionate about promoting the circular economy in the auto industry and refurbishing EVs. Sustainability and circular economy strategies go hand in hand, with cars being the perfect product to be reused, remanufactured and recycled.

“Sustainability and circular economy strategies go hand in hand, with cars being the perfect product to be reused, remanufactured and recycled.”

The circular economy is an increasingly attractive option for automotive players who want to be more sustainable, and shifting to circular manufacturing can open new business models and drive profits.

For example, Renault and Stellantis are both looking at businesses that encapsulate the circular economy. Obviously, decarbonisation plays a role in their plans, but they also have a focus on profits and lowering costs through the circular economy.

The Circular Cars initiative, a collaborative ecosystem-based program led by the World Economic Forum, lists vehicle sharing, smart charging, refurbishing, repurposing, and recycling as effective measures to reduce lifecycle environmental footprints and costs. The project has a clear agenda: to increase the environmental sustainability of mobility.

New mobility services

In the past, car ownership was the predominant model of mobility. However, in recent years with a new younger generation of drivers and increasing urbanisation, the focus has moved away from ownership to usership to mobility as a service (MaaS).

The most popular MaaS models are car sharing and subscription, both providing an alternative to owning or leasing. Most of these MaaS programs offer individuals access to a range of cars with new world tech, with maintenance, roadside assistance and insurance included for an all-inclusive price, lowering the cost and commitment involved in owning a car, and offering a flexible alternative to ownership. People choose subscription primarily for two reasons—either to expand their choices of cars to drive or to reduce the hassle of ownership of a depreciating asset.

Boston Consulting Group1 has highlighted a number of reasons why car subscriptions are gaining consumer interest:

  • Buying a car the traditional way is tedious: Many consumers find the conventional car-buying experience to be a hassle and they dislike the sales pressure.
  • Ownership is less flexible and can be risky: The commitment is long, whether buying the car outright, financing it or leasing, and the residual value loss and risk is off-putting for many car owners.
  • Car ownership is losing its lustre in many parts of the Western world: Ownership for young people is no longer the status symbol or all-consuming aspiration it was just a generation ago. People have a more utilitarian attitude about driving, and studies show that growing numbers of people do not think they need a car to get around.
  • Subscriptions are a low-risk way to try out new brands and BEVs: Consumers who might shy away from new brands or battery electric vehicles are more willing to try one out through a subscription.
  • Subscriptions are an attractive supplementary option for B2B customers: Subscriptions enable business customers, particularly small and medium-size enterprises, to quickly adjust their fleet size based on demand, and react to changing business conditions.

“In the current market, there is no one-size-fits-all mobility solution.”

However, the vast majority of people are still reluctant to move away from the age-old concept of car ownership, especially to a more expensive albeit more flexible option. As Alice Altemaire confirms, people are reluctant to give up the exclusive use of a car but this generational change will happen over a longer period of time. In the current market, there is no one-size-fits-all mobility solution.

In addition to traditional car owners, subscription and car sharing presents a dilemma for car manufacturers as fewer cars will be needed resulting in less CO2 which is good news for the environment, but for OEMs who want to sell more cars, the idea is not so appealing and profitable.

However, Mobilize’s Alice Altenaire is optimistic highlighting that less new cars were sold for the first time in fifty years in 2021-22, but financial companies, dealers and car manufacturers were still profitable, resulting in a very fruitful year. This shows that you can drive value over volume and is a positive sign when you look at the rising costs from technology, with BEVs being more expensive than ICE vehicles.

Mobility solutions are currently not creating much revenue, but utilisation is the holy grail as it leads to less cars meaning less emissions and a value-added product that provides a full-lifecycle of the car.

Alice Altemaire is aware that, while subscription is still minimal at the moment, it is slowly gaining traction, but as she rightly says, “you need to start the journey somewhere and need to have a forefront approach and the integration of working together (manufacturer, engineer, finance company, supplier) will support the global value chain and the customer.”

Looking to the future

Like Mobilize’s sustainability business model, Alice believes that all organisations need to understand the emissions of their own business and start from that point: reduce Scope 1 and 2 emissions and look at how you can support your customers with Scope 3 and any transition. Sustainable future-proof strategies are needed with products for the future.

In the short-term, such incentives are good for everyone’s wallet and in the long-term they are good for the company’s revenue line, but all sustainable forward-thinking mobility solutions are good for the planet.

Planet and profit can perform successfully side-by-side – green strategies that will help the environment are in unison with company profitability, with many customers now looking at the green and ESG credentials of an organisation to determine if they are worthy of their business.

Alice Altemaire’s resounding message at the AFC Winter Conference was that saving the planet goes hand-in-hand with saving money and increased profitability so everyone must act now.


1 Boston Consulting Group article – Will Car Subscriptions Revolutionize Auto Sales? – – July 12, 2021

Find out more about how new finance products can improve our lives, respect the Earth and deliver a sustainable future by reading the analysis of the Asset Finance Connect Conference Session sponsored by Teamwill

Analysis from David Betteley AFC Auto content leader

It’s refreshing to interview a business leader like Alice who really “walks the talk”. Everyone is in a conversation nowadays about saving the planet, but for many that’s just a slogan. However, for Alice and the business she leads it is simply part of the culture…the way that they do business at Mobilize.

There are many examples in the article that detail exactly how Alice is putting the planet first, not allowing any “greenwashing” but making sometimes hard business based decisions to reduce the carbon footprint of Mobilize.

Alice has implemented policies that enable the business to accurately measure their Scope 1 and 2 emissions and has developed strategies to deliver continuous improvement in the overall carbon footprint. This demonstrates real “Environmental Kaizen” if that’s a term that can be used to describe what is being achieved!

Scope 3 emissions are also being closely monitored, even though this is of course a very difficult task. As well as monitoring Scope 3 emissions, Mobilize is providing advice and tools to its customers to help them to move to more sustainable transport solutions using a combination of BEVs; new, shorter term, flexible mobility products; and better utilisation of their existing fleets; therefore, actually reducing the Scope 3 emissions of the vehicles sold by her OEM owner.

Alice recognises that this is a long process and she is keen to emphasise that what has been achieved so far are only the first steps in a journey on the long and winding road to complete carbon neutrality. She recognises that car ownership and/or exclusive access to a car is still important to most people, so the strategies that she is employing take this into account.

I’d like to wish Alice every good fortune in what she is trying to achieve at Mobilize. Her ideas and the solutions implemented so far should act as a blueprint for the rest of the industry to follow.

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European automotive

JBR Capital: accelerating the high-end vehicle financing market


Through a combination of a highly personalised approach and key strategic partnerships and channels, JBR Capital has immersed itself in the high-performance automotive community.

They understand the special relationship and passion that their customers have for their high-end dream cars and see their role as facilitating that dream and passion for luxury vehicles. Through this unique relationship, JBR place the customer at the heart of the business, from onboarding through the entire customer journey.

Chris Seaward, Chief Operating Officer at JBR Capital notes that, “at JBR we understand that the emotion for high-value cars exists with our customers and we are happy to help them achieve what they want to achieve.”

Rapidly developing relationships within their multi-channel network of dealers, brokers, franchises and direct customers, JBR Capital have achieved a reputation within the auto finance sector as the only specialised UK independent lender of high-value cars (from £25k to £750k) in the regulated and non-regulated space.

Building on significant momentum since the business was founded, JBR Capital has accelerated over the last 12 months – 2022 being the company’s most successful year with £279 million in lending alone – surpassing £1bn of lending since their inception in 2015.

Their growing business has seen their workforce rise from five to six ‘colleagues’ in 2015 to over 80 today. The maturing of the company allows them to look ahead and see growth for the future, aiming to repeat another £1bn in lending in just two years’ time by growing business across all channels.

Growth has been substantial and JBR has lofty ambitions. Over the past eight years, JBR Capital have shown that their model works, helping them to weather the economic challenges of Covid, Brexit, interest rate rises and rising inflation over the past few years.

“There is huge opportunity in our core business which we are looking to maximise all of the time.”

Multi-channel approach

JBR Capital operate through a multi-channel network – dealers, broker channel, franchise network, and direct to customer – and are constantly expanding all channels to reach their targets.

While these individual networks are all important to JBR, the strong broker market is the largest distribution channel with business soaring following the Covid pandemic. JBR also see significant future growth from the franchise channel presenting a big opportunity for expanding the market.

JBR works with its loyal introducers to maintain a ‘customer for life’ philosophy. As Chris Seaward notes, JBR’s introducer partners are strategic partners in the long-term vision of the business, and “the relationships with introducers are really important and the backbone of what JBR is built on.”

“Our introducer partners are our strategic partners in the long-term of the business.”

JBR believe that the direct to customer route is a more passive channel for JBR and will increase as the company grows and the brand becomes more visible through a number of initiatives:

  • Tactical marketing and PR strategy
  • Connection with luxury car enthusiasts by partnering with sector organisations and clubs
  • Car shows – supporting the community and demonstrating JBR’s expertise in the sector

JBR Capital’s expertise and knowledge in high-end cars and customers in this niche market is very prevalent and they are seen as the main expert in the field. As Chris Seaward confirms, “As the business grows and becomes more capable and more credible and can deal with larger volumes, we will have an increased appetite to talk to a range of people about where we can help them with financing options.”

JBR see one of their key strengths as continuing to be independent and brand agnostic so that they can serve the whole market rather than specialising on any particular sub-segment.

Product range

JBR offer a limited range of regulated and unregulated products which fit perfectly with their clientele’s financial objectives – fixed and variable rate loans and hire-purchase products (with and without a balloon payment).

New mobility finance solutions including pay-per-use and subscription products are not offered by JBR Capital as they feel that they won’t work effectively in their niche sector and will not suit the needs of their traditional-style customers who, as enthusiasts who want to love and own their car, want the pride of ownership.

As Chris Seaward highlights, “We have a specific niche market of customer who love their cars and love to own them and I don’t see the subscription model coming into this space in the near future.”

Value-added products

Currently JBR Capital do not offer any value-added products, but with a growing client base and a solid foundation, JBR are always interested to explore different revenue-generating opportunities and partners who can complement their existing platform.

However, with only a 5% market share in their current market segment, JBR’s main focus is to grow and increase their market share in the lending space in their core business. In the future, they see a huge opportunity in generating revenue through additional value-added products and partnerships.

JBR have a platform where customers can advertise their cars for sale. This is an additional customer service offering. JBR do not own the cars and do not offer a wholesale stocking facility.

Customer relationships

Digitally enabled onboarding with a human touch

JBR Capital are a digitally enabled lender with a human touch; a business that fully understands the special relationship that their customers have with their cars.

The JBR onboarding process is a mix of manual and digital. While they use digital interfaces and APIs, the key differentiator between JBR and other lenders is that they perform manual underwriting. While they have the ability to have automated decisions as a guideline for underwriters, they also have a manual process so that they can understand the ‘real’ risk and opportunity.

JBR operate a rate for risk criteria where each introducer has a price banding from JBR with a fixed commission.

JBR Capital currently have access to sufficient wholesale funding arrangements to enable them to exploit their growth ambitions and to help them meet their aspirational target of £1bn in the next two years. This lending comes from a number of sources: senior lenders, mezzanine lender and a private facility, and in the future JBR will hopefully look at a public ABS transaction.

Good customer experience

For repeat customer business, JBR will direct the client back to their original source channel to maintain a consistent customer experience and seamless journey. JBR can boast excellent levels of customer retention, especially through their broker and direct channels, with strategies in place to retain customer loyalty.

A key strategic project for the future of JBR Capital, according to Seaward, is a JBR customer portal, enabling customers to access their account digitally and therefore further enhancing the customer relationship.


During the turbulent times of the Covid pandemic, JBR Capital followed the necessary regulations and witnessed a good experience throughout with their customers, resulting in few negative outcomes.

The company offered payment holidays, which had a relatively small uptake of approximately 20% of their book during the peak of the pandemic in 2020.

Seaward highlights the needs during this time to liaise with funders, implement new processes and educate the work force. He believes that learning how to react and re-engineer processes during this time tested JBR as a business, but it was a challenge that provided a good learning experience.

Consumer Duty

At JBR Capital, the customer is at the heart of the business and customer service is particularly important. As such, JBR are effectively adhering to and are fully compliant with the new Consumer Duty guidelines.

According to Seaward, JBR want to fulfil the spirit and letter of the Consumer Duty regulation, with the guidelines embedded in the DNA of the company.

Plans for Consumer Duty at all levels of the business were formed four to five months ago and are now fully implemented throughout the whole business. Raising the standards from TCF, Consumer Duty can be found throughout the entire end-to-end customer journey.

“Consumer duty is in the DNA of the company.”

JBR are proud members of the Finance and Leasing Association.

ESG credentials

JBR have implemented their ESG programme over the last two years, making excellent progress across all divisions.

Launching an industry standard-setting sustainability initiative in 2022, JBR Capital partnered with Carbon Neutral Britain by offsetting 5,000 miles of carbon emissions for each car financed by its clients, greatly reducing the environmental impact of high-end vehicle ownership.

The programme allows JBR to offset the carbon emissions of the first 5,000 miles in the first year of ownership for the client and the client can then sign up to the initiative for subsequent years.

Previously focusing on Scope 1 and 2 emissions where JBR have offset all business emissions, the sustainability initiative looks at ‘sold services’ under Scope 3 emissions by offsetting customers’ carbon emissions, an example of JBR’s responsible lending approach.

Seaward highlighted that JBR have a rightful obligation to do this for their clients and the planet when they finance cars that omit the most carbon. JBR’s initiative is also in line with their specialist financial services private equity investor, Cabot Square Capital, who have a strong demand for ESG strategies in their portfolio companies.

Other ESG strategies include engaging with two local charities – City Harvest and Talent Rise – to stay connected to the local area in which JBR can try to make a difference.

This philosophy continues into the JBR workplace, with employee-led initiatives in D&I, mental health awareness, wellness champions, and various workshops. Seaward emphasised the importance of a positive culture at JBR Capital, in order to retain staff in a niche marketplace and have an engaged workforce, which translates to an engaged customer.

“We’ve tried really hard at JBR to build a positive culture to retain our staff as the niche expertise we have is really important to us.”

Find out how JBR Capital has immersed itself in the high-performance automotive community by viewing their website

Analysis from David Betteley, head of Asset Finance Connect auto finance community

JBR is a great example of a business that really understands its customers, how to serve them and deliver industry leading satisfaction levels.

It has a clear strategy regarding its present-day operational scope and how to develop in the future by growing organically its existing channels to market, whilst at the same time innovating with new products that will first and foremost deliver value to customers, which will then, as a result, grow the revenue and profit base of the company.

The company has a thorough understanding of the challenges, risks and opportunities that it faces and it is managed by a core team of seasoned industry professionals. The go-to market strategy is an interesting mix of manual and digital which enables omni-channel delivery, which in the opinion of the writer will continue to be the preferred method for JBR’s customers to interact with the business.

I was particularly impressed with the engagement of the JBR staff that I met whilst researching for this article. The company has a clear message to its customers and also to its staff. In a people-oriented business dealing with high-net-worth individuals and their cars this has to be the correct recipe!

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