Almost every industry and market has been affected by the coronavirus pandemic. It has created significant challenges for operators in the global auto and equipment finance industries. And while the arrival of vaccines is a cause for optimism, the long-term future remains unknown. However, industry leaders agree on some aspects.
Higher cost sensitivity, avoiding long-term obligations and price transparency are likely to remain important factors for customers considering leasing assets. Even with a successful global vaccination programme, it is possible that long-term remote working for auto and equipment finance lessors, restricted access to showrooms and a higher demand from customers for online purchasing will continue to be significant factors well into 2021.
Igor Szabados is head of business development, EMEA at Alfa, a leading provider of technology solutions to major leasing companies, including major high-street banks as well as other specialist leasing firms and lenders. Szabados says the way people are buying software is changing.
“A year ago, requirements reflecting mass hardship strategies in a system selection process were an exception,” he says. “Now this is normal; prospective clients now expect mass hardship scenarios to be demonstrated as part of the selection process. Examples include bulk changes, intelligent process automation for the portfolio segment impacted by the hardship, omnichannel servicing and chatbot integration.
“Finance providers who are stuck with legacy systems and other outdated tech are facing just as difficult a time as their own customers. We have all had to adapt to new challenges that are different from anything we’ve faced before. It’s been an issue for all players: how best to adapt to this new and still-changing environment,” he adds.
Szabados lays out first hand instances where he has had to work with auto and equipment finance clients to create solutions for new problems brought about by Covid disruption.
The shift to remote working
Many auto finance providers discovered early that the pandemic drastically impacted their offshore call centres. In countries where personal laptop ownership and home internet are not ubiquitous, the result was understaffed call centres not suited to remote working, and a significantly reduced capacity to handle call volumes from end customers looking to organise their payments or borrow more.
“One European player was not primed for remote working, so staff members were obliged to return to office working during the pandemic,” says Szabados. Alfa clients are able to anticipate these issues by increasing digital functionality.
“A better online user experience, with expanded self-serve capabilities for high-volume transactions, has solved many of the potential problems that customers might encounter if there is reduced call centre capacity. End customers are able to log in and change their details directly, as well as make alterations to their payment schedules or organise deferrals. This is backed by Alfa omni-channel workflows that ensure adherence to regulations and internal business policies, just like interacting with a call centre agent,” explains Szabados.
Flexible payment schedules and deferrals have become necessary for millions of customers around the world and processing a high number of payment deferrals took weeks to organise. It forced many organisations to remove key staff from other aspects of their business, such as answering phones and improving the self-serve offerings.
“One major US-based client was able to plan for and execute over half a million deferrals within a matter of days, using Alfa Systems. This was enabled by Alfa’s no-touch processes, driven by a rules engine to ensure compliance. Some systems on the market are far from capable of making this type of change, either quickly or with so many contracts, while others don’t allow their clients to change a contract at all,” adds Szabados.
Changing customer needs and speed of use
In 2020, the auto sector saw a major drop-off of in new business. In some cases, companies have had to approach funders to securitise their portfolios. The ongoing pandemic has also precipitated increased reporting and disclosures, says Szabados.
“Many of our clients have had to track delinquency in new ways, and this has had an impact on income suspension. In general, the numbers are simply no longer comparable with those of previous periods, and here Alfa’s user-driven, self-service access to key business metrics provides crucial guidance on real-time business decisions.”