Digitalisation in the time of pandemic was the dominant theme during the 2020 Leasing Life Virtual Conference & Awards today.
The tone was set by the day’s keynote speakers at Leasing Life’s 16th annual event, the first ever held virtually after its scheduled face-to-face event for Vienna this year was cancelled following the outbreak of the coronavirus.
Representing Société Générale, KPMG and DLL, the keynote figures all centred on the importance of embracing digitalisation in order to survive the ongoing economic and health crises.
The presentations covered the future of asset finance, the opportunities for Equipment as a Service (EaaS), and partnering for a better world in the face of a pandemic.
Speaking first, Jochen Jehmlich – CEO of Société Générale Equipment Finance – explained the importance of digitalisation for leasing firms to “better support our customers” and for “greater efficiency in the back office”.
Citing benefits such as cost efficiency, increased revenues and greater customer value, Jehmlich highlighted that the process of digitalisation may require “huge” investment, and may bring considerable uncertainty over its final profitability.
Considering the implications for customers, Jehmlich asked: “Are our clients ready for digital relationships? Are they comfortable with a no touch business?
According to Jehmlich, customers often embrace personal relationships. This was evident, when, during the crisis, “everyone expected huge increases in digital relationships, but instead, customers decided to call”.
Jehmlich believes in order to succeed with digitalisation, it is key that firms constantly re-evaluate, ensuring any strategy is reflective of the real-world situation.
Mike Janse, COO at DLL, described the role of digitalisation in enabling the firm to overcome the impact from coronavirus.
Janse said: “We are continuously looking to enhance the ease, speed and quality of doing business with DLL. To meet rapidly changing customer demand we must continuously accelerate our digital transformation.”
Janse continued: “Our ambition is to have digital solutions like automatic electronic document signing, mobile apps and more, in place with as many partners as possible to make DLL interactions more seamless. The deployment of automated processes, electronic document signing and the use of portals and mobile apps automatically accelerated when the crisis started. In fact, the crisis helped us to speed up the process of getting our small ticket business in the target markets, fully automated and paperless.”
The rise of EaaS
Digitalisation will enable leasing firms to tap into other industry trends such as Equipment as a Service (EaaS).
According to Max Eberle, a manager at KPMG, the EaaS market is “positive and promising”. Digital pioneers, such as Netflix, have shaped consumer expectations. Now, “EaaS has the potential to do the same for B2B” he said.
Speaking at the Leasing Life Virtual Conference, Eberle said: “subscription models are already taking off”, citing the latest example as the EaaS cooperation between reinsurance provider – MunichRe – and high-tech manufacturing firm – Trumpf.
Eberle continued: “As typically only 20% of revenues stem from leasing itself, EaaS offers a huge upside potential” however, growth from EaaS will demand “fundamental changes in firms” with the Internet of Things (IoT) representing a key element in a company’s ability to appropriately adapt its value proposition.
Jehmlich agreed that the trends of “usage versus ownership” represented a challenge for the future of the leasing industry. Jehmlich explained: “More usage models are in place, and we have see the first examples in the leasing industry with cars. End customers are readily evolving to usage models, reflecting the demand to pay for asset use, rather than the asset itself.”
Diverting back to the digital, Jehmlich continued: “This implies new risks, and what we need is data. We have the means in digital, datamining and AI to build interesting models, in cooperation with our vendors. If we master this challenge, there is a great future for the leasing industry.”
Other prominent themes were environmental considerations for the industry, maximising customer value, and ensuring sufficient employee support during these difficult times.
Fifteen speakers from across Europe spoke at the event, covering independent finance providers, vendor finance companies, management consultants, IT developers and service providers, and bank asset finance providers all took part.