We have the technology to counteract fraud, and we intend for lessors to use it, writes Mike Chowney, director, The Asset Works
A cohort of 150 firms conspired against a group of Italy’s most prominent lessors, which
now find themselves an estimated €35m out of pocket. The assets do not, and never did, exist.
Why is the leasing industry so vulnerable to fraud on this scale? Is it the distance between owner and asset? Perhaps it is the sheer volume of assets financed?
Or is it the traditional complexity and cost of monitoring the assets?
Answering these questions could play a central role in reshaping the leasing industry for the next decade. The fight to combat financial crime will play a central role in the years ahead.
For the leasing industry, this means a combination of creative measures and new technologies rising to the challenge, and countering this growing menace.
Otherwise, we face the prospect of further bleak headlines.
Protecting a handful of assets may be relatively easy, but the ongoing verification of
larger, international asset portfolios is complex.
Portfolio managers need to put multiple hurdles in the way of would-be fraudsters in order to protect their assets from being exploited.
Traditionally, a lessor had to rely on expensive physical verifications to check its assets,
but new solutions are much more cost-effective and scalable.
The Asset Works has launched the only tamper-proof, electronic asset tag in the world. This tag cannot be removed from the asset without the lessor being informed.
Vastly more cost-effective than physical verification, the tag can be electronically queried at regular intervals and will securely verify the ongoing existence and location of an asset using GPS technology.
There is no such thing as a fraud free industry.
In an industry as large as leasing, which has many very desirable and tradable assets in the field, there will always remain an element of risk.
However, lessors can help to protect against fraud: know your assets; know their location; create a structure where lessees no longer believe they can get away with it; and be proactive – go and touch metal, physically and electronically, as much as is economically feasible.
Together these measures impart a very powerful message to the lessee: we care about our assets and we are checking up on them. We have the technology to be proactive, and we intend to use it.