Axel Sauerland, leasing industry leader, IBM Global Business Services explains the effect of the changing use of the internet on client expectations and interactions.
The leasing industry finds itself more and more faced with big changes. The quick changing market environment (financial crisis, regulatory actions) as well as permanent changes of the customer needs (social media, mobile financing, alternative ways of life) confront the management with new challenges. Not only that the business model has to be constantly questioned, additionally the leasing institutions have to satisfy the requirements of different customer generations. Innovation gains a new meaning in the leasing sector.
In Web 2.0, social media tools provide the technical possibilities for publishing, communicating, liking, presenting oneself, networking, sharing, and collaborating of companies, partners and customers. Generation Y has grown up with these tools and is the first generation that is used to computers from childhood on. Hence, communicating via social media is their daily business.
Thus, they have another way to inform, communicate, decide and buy (financial) products. The contemporary user of social media tools is highly netted with a huge number of consumers being signed up to Facebook, Twitter, YouTube, and others, and can demonstrate social nfluence within these communities, see so-called ‘shit-storms’.
Additionally, he is extremely sceptical about traditional advertising slogans and does not trust them anymore. As surveys show, already today’s financial products are in need of explanation and support, like insurances, are bought by 30% of people deciding themselves, i.e. without any sales contact. Concerning banking products, 60% of the interested persons start their buying process on the internet – with search engines, comparison portals and supplier sites. The factor "convenience" plays a special role for generation Y: the easier the handling of a process, use of an app, the leasing contract is to understand, the higher is the probability of a positive feedback on the net ("like button").
Based on this, how is the transformation from leasing company 1.0 to leasing company 2.0 reorganised?
First: Today, the social business of the leasing company has to be present on many channels: on social platforms, in opinion portals, on news sites, on price-comparing portals, in search engines, and more. A consistent presence on mobile devices is essential, covering the provision of accurately fitted applications and Apps for the mobile leasing. Keyword: omni-channel integration. The leasing customer can communicate more comfortably, but not before the different channels offline, online social, mobile are interlocked with each other. Omni-channel customers check and use the channels in any combination.
Second: The generation Y desires clear and simple information, also and especially concerning financial and leasing products. In terms of transparency all cost structures have to be revealed, "hidden fees" are a taboo. The leasing company should only provide the information that is relevant for the certain phase of the offer/term of contract. Presentation plays more and more of an essential role. It should be smart, modern and cool. The leasing institute should not provide the lessee a standard consultation, but it should help its customers to consult each other.
Conclusion: The further development of the internet by Web 2.0 will challenge the leasing companies during the next years concerning design of offers, sales approach and information management. Therefore, the starting position of IT systems needs to be addressed, as legacy systems of the leasing companies originate from the eighties and are not really suitable for the digitalisation of the clearing processes.