For the UK, events outside our industry seemed to dominate much of the world. However, outside all the political noise there were several trends that may well define our performance over the next few years. Investment in fixed assets generally has shown a fall and that of course translates to the size of the “pie” to be competed for. The result, from a “helicopter view” of the industry has been a continuing pressure on net margins and a rise in risk.

In competing for volume, we are seeing a degree of increase in risk acceptance and an increase in default experience. At this stage the trends are relatively benign, but there must be some concern if the wider economy does not get back into solid growth, and more importantly if investment in fixed assets fails to pick up. This year has shown increasing moves towards more sophisticated automation with “smart” systems and AI being much talked about.

It has been interesting to see that the most activity here is in the area of automotive and as a gross generalisation the equipment finance sectors have been relatively quieter. I am sure that this will change as the need for AI and related efficient systems will become vital in order to remain competitive.

However, what I am concerned about is the degree of change required to make the most of the technology. What I don’t yet see is a major shift in how the industry recruits, trains and incentivises its people and develops next generation leadership. To my mind this is the most fundamental building block of success for the future and will give the best in class businesses as very different looking shape from that which we see today.

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