Why, where and how asset finance brokers should use tech in their businesses
An AFC webcast in association with NETSOL Technologies
Summary
The second Asset Finance Connect (AFC) webinar in a series which focuses on the broker-lender channel. Sponsored by NETSOL Technologies, this webinar explores the role of broker technology, looking at why, where and how brokers can use tech to do more business, improve margins and better serve customers and lenders.
Brokers should not see tech necessarily as about end-to-end automation. Brokers should instead identify what their specific needs are for tech and select the best solutions for the purposes they have identified as important to them.
For some businesses with a high flow of small commodity transactions brokers may wish to automate more. For other low volume, high value businesses the needs are different, and the solutions will therefore vary, perhaps focusing on removing administration or as a co-pilot assisting the broker.
Brokers are deploying technology to originate more business. Brokers should expect to increasingly connect with customers via digital channels; and will also use tech to find and manage customers more efficiently as they scale.
Brokers can also use tech to reduce cost through automation – reducing administration, leaving them free to focus on where they add most value.
One opportunity mentioned by many brokers was to deploy tech to improve the look to book ratio (reducing the proportion of deals sent to lenders which have a low chance of success).
Another key requirement appears to be to manage compliance – an increasingly time-consuming part of the work of brokers. This might include evidencing the customer journey.
The importance of the broker investing in their own tech was highlighted. Tech is not one-size-fits-all, so standard solutions offered by lenders are unlikely to solve all the needs of a broker.
The emerging model is to buy modular tech; small scale implementations which solve specific needs and to build these progressively. These solutions can be connected via APIs.
Why? Is tech the way forward for brokers?
A growing broker community, fast-growing brokerages and changing customer expectations have resulted in an increasing need for technology to drive efficiency in the industry, according to Jason Hurwitz, sales director, Europe at NETSOL Technologies
Technology needs to be part of the customer journey to complement the human interaction that the broker community is built on.
Some brokers view technology with suspicion, notes Tom Perkins, director and co-founder at Charles & Dean. Technology is not for everyone and is not “a one-size-fits-all solution for all brokers”. Perkins sees the main barrier to technology as “cost anxiety.”
Perkins believes that brokers need to go on a journey as a community to explore technology and see how it can enhance and enable the brokers’ business models.
He identifies many areas where embracing technology and becoming tech enabled can provide huge benefits for brokers, including compliance, efficiency, distribution and origination.
Tech with a purpose
For Andy Taylor, sales director at Haydock Finance, the key is “tech with a purpose”. The most important question to address is where broker expertise adds most value.
“A lot of tech is looking to solve problems I’m not aware I’ve even got. What tech can help with is the straightforward deals, leaving brokers with more time to spend on the deals which do need time – the more complex ones where the broker really needs to understand what the customer wants to achieve, “he pointed out.
His view was endorsed by Astrid Michael, head of sales for at the asset finance division at United Trust Bank who sees the value in using tech for straightforward transactions rather than for more complex value added deals.
Identifying the “pain points” where implementing tech brings greatest rewards is important. “We’ve adopted deal categorisation, so for low friction, and lower level skill interactions we use as much tech as possible to drive that customer experience. That leaves brokers more time for clients where there’s the opportunity to add value by acting as a point of information and a guide,” noted Perkins.
Digital audit trail
Technology probably will not replace the entire customer journey, notes NETSOL’s Hurwitz, but can be added to specific steps in the process, and where it can bring the most value.
The value of tech is evident in the compliance journey with the digital audit trail becoming increasingly important. Michael noted, “We expect brokers to keep good records evidencing the customer journey from the regulatory and compliance aspect and tech is hugely beneficial there.”
Digital audit trails are useful for evidencing compliance and best practice in conduct towards customers, so it is not surprising that 85% of webinar attendees think customers and vendors will expect to interact digitally with brokers in the future. Perkins said this will help remove bias and inconsistencies in decision-making and demonstrate impartiality.
Haydock’s Taylor noted that, with the FLA and NACFB implementing digital audit schemes for brokers, “the more of the journey that can be evidenced by digital audits has got to be helpful with compliance and conduct.”
With the regulatory environment constantly changing, brokers must respond fast to each new compliance need. Tech can make this process more efficient and help to provide more effective solutions, according to Hurwitz.
Hurwitz suggests that NETSOL’s products bring added value because they provide a digital audit trail that is incorporated by design into all their products.
Digital first
As digitally aware customers and employees transact asset finance business, the use of mobile phones and mobile apps will become increasingly widespread, according to Andy Taylor.
Taylor points out that technology can also enable younger brokers, who are entering the market with no experience, to learn faster. It helps plug gaps in their training.
Michael agreed: “Younger brokers potentially have not had the same level of training or experience in origination as more established brokers. Pre-qualification tools really help to support them in assessing creditworthiness and matching customers with an appropriate lender.”
Perkins notes that “technology can be used to adapt better behaviour and a better culture.”
Build to integrate
Adopting new technology can be a daunting and costly process for brokers, according to Perkins.
The challenge for brokers who build their own tech platform comes when they interact with lenders and their portals and have to re-key information multiple times. The use of APIs allows broker tech and lender tech to connect directly. This avoids the problem.
AppexNow
NETSOL Technologies has launched a new suite of apps – solutions which are designed to meet the likely needs of brokers. The suite which is called AppexNow consists of a number of modular component-based solutions which can be applied and used individually. They can also be connected via APIs, to build bespoke more comprehensive solutions that meet the individual needs of a broker
“What we are aiming to do, with our cloud-based, app-driven offering AppexNow marketplace is to provide the core pieces of the puzzle but acknowledge that how they are used will vary from broker to broker. With a modular base and a series of apps like building blocks, you can start with an isolation application and grow with it,” Hurwitz explained.
AppexNow includes apps that provide a calculation engine; rapid document generation; data management; multiple integrations; loan origination platform; and many more.
AppexNow allows brokers to access leading leasing technology without needing the big budgets or having the infrastructure to run large complex IT programmes.
“Traditionally NETSOL has focused on lenders but our new suite is built with the capabilities to enable brokers to access tech systems as and when they need them, and on a subscription basis,” Hurwitz said.
In a poll of webcast attendees, 86% agreed that technology needs to be affordable and deliver value without expensive and difficult implementation that are characteristic of larger scale platform solutions.
To find out more about NETSOL’s marketplace of API-first products for the finance and leasing industry, visit https://appexnow.com/
