“Leasing is a competitive sport, but we are largely on the same team.”

That is what Ian Isaac, managing director of Lombard, wants colleagues to think of the effort to answer customers’ new expectations of asset finance.

The audience he addresses, from the podium of the Leasing Foundation’s Think/Forward conference, may come from traditionally competitive firms – but today’s challenges affect everybody in the field, and demand a collective rethinking of how leasing is perceived.

Holistic sales approach

The first challenge relates to the industry’s identity. Andrew Denton, chief executive of Alfa, notes: “PCP is a product; leasing is a product. We seem to define ourselves in terms of the tools we work with, rather than the solutions that we promote, to [help] people acquire assets.”

So, he asks, how do we move the leasing discourse from providing a product to providing a solution?

Carol Roberts, managing director of Bibby Leasing, agrees. “For me, we are a service industry,” she says, although this is not reflected in the sales process.

“We are old-fashioned with our products. We do not [always] offer solutions.

“[Say] a customer has a coffee shop, with a coffee machine on a lease, which breaks down. They want to be able to say: ‘My coffee machine has broken, it is core to my business – I need it repaired.’”

That, Roberts says, is something that the sales process should cover as well.

The solution-first approach also extends to PCP, in light of its recent mainstream attention in the national press.

Stephen Sklaroff, director general of the Finance and Leasing Association (FLA) says: “The whole PCP issue should be, in my view, about the solution that is being provided to the customer.

“PCP is one product in [a] motor finance market which has many other products. You would not expect the same product to always be the best for every customer.”

The challenge, Sklaroff says, is to avoid bifurcation taking shape between bigger funders who only deal with products and smaller providers who offer services.

The risk, Isaac adds, is for the incumbents to be “Ubered-out” by these new disruptors if they do not keep up with clients’ expectations.

The digital journey

Industry players must see the market through the lens of customer experience when redefining their service orientation.

A lessor, Denton says, needs to strike a balance between listening to a customer and telling them: “Actually, there is a better way to do this.”

When providing solutions – in Alfa’s case, software – time is often understood to be the only variable to play with when proposing a package to a client, which can result in tunnel vision.

“The way to do it [instead] is to look at scope as the variable,” he says.

“If we make time a non-variable, and the things you do are a variable, then we actually compress time,” and deliver results at a more productive pace.

Even when it comes to listening to customers, the industry needs to take a more proactive approach.

Customer interaction not only happens when meeting face-to-face, at the point of sale, but also through the data customers provide – not always wittingly.

“There was this belief that once better data was available from the various open banking platforms, the world would change,” says Peter Alderson, managing director of LDF Finance.

“Most people in this room know that is absolutely rubbish. It is what you do with that data [that matters].

“As we are responsible for people’s data, and people are willing to give us data, they expect us to give something back: ‘You are going to use that to tell me what I can do, when I can do it, and to make things easier for me.’

“If we do not do that as an industry, whatever we call ourselves, then we will have wasted a great opportunity.”

Generational turnover

Of course, innovation needs to be led by the right people. It is in the interest of the industry itself to be more inclusive with its workforce.

That is an issue that is particularly dear to Roberts: She recalls how hard it was when she first started out in a male-dominated asset finance industry, and says she is pleased to now see so many women at a leasing industry conference.

But to improve diversity, companies need the right data to assess the situation. “We have an out-of-date score card,” says Roberts. “How many women are at senior level? How many are middle and junior level? What are the policies for mental health? We need to set questions that are actually useful to us.”

Inclusion, however, is not just about gender, but age as well. Isaac expresses the need to provide a clearer career ladder for those who are thinking of a career in asset finance.

“My view at the moment is that if I were a youngster coming into the industry right now I would not know where to turn or where to look to build my curriculum,” he says.

Additionally, there is an element of education to be considered. Denton notes that no financial education whatsoever is given to children in school – and yet by the time they are 16 they are expected to manage their own finances.

The right structures

Attracting the right candidates also requires the right organisation and the right accountability structure.

“Trust is very important,” says Emma Thomas, UK country proximity manager at Siemens Financial Services. “It can be difficult and challenging for businesses to create, and it is very easy to break.”

Denton agrees, and adds: “You cannot get people to collaborate unless there are the right incentives and the right structure.” That does not mean devolving responsibility in such a way that circumvents regulations, notes Thomas – quite the opposite. “Businesses that have been successful in being ‘agile’ tend to be very clear in what their values are – they have strong leadership, a strong sense of direction.”

That the industry has the right culture needs to be showcased to potential entrants to the business, lest they think a career in asset finance asks for too much in exchange for too little. Indeed, consultancy Bovill recently warned against expanding the Financial Conduct Authority’s accountability regime further, fearing it might scare off job applicants.

It is a struggle to attract young applicants, says Matt Williams, head of wholesale fleet at Close Brothers Asset Finance.

“We do not struggle if we target our advertising to apprenticeship programmes, but if you put a job offer out for a standard role within the business, there are few applicants below the age of 35,” says Williams.

“Especially in sales, it is almost impossible to find a younger person for the role. And when it comes to gender diversity and cultural diversity, it is a challenge to recruit those people.”

The key to solving the problem, in the opinion of Paul Slapa, head of direct sales at Wesleyan Bank, mainly lies in having the right infrastructure for progression inside the business.

“I think a lot of businesses struggle with that, and we certainly struggled with that,” he notes. “We, as an industry, could improve on education by collaborating better.

“I remember sitting here 12 months ago and talking about the fact that we all sit here saying that we want to collaborate more, but I do not remember during the next 12 months seeing any collateral being shared between other financial services firms.”

Finally, companies should be prepared to deal with a different way of seeing the workplace when they welcome newcomers.

“In the market there is this huge convergence between consumer and businesses, and that is ultimately impacting people’s expectations when they come into work at any type of organisation,” says Sharon Butler, director of leasing at Ricoh Europe.

For example, younger employees want a lot more schedule flexibility, as Slapa notes. “You have to accept these expectations as a business, you have to embrace it,” he says. “Otherwise you are not going to attract the best new recruits to the industry. It is certainly a challenge – a tough one.”