AFC UK Summer Conference 2024: Making regulation work

The Asset Finance Connect (AFC) Summer Conference 2024 marked a significant milestone with a new venue at County Hall in London and Odessa as first-time headline sponsor. Held on June 6th, the event welcomed 400 industry professionals from the auto, equipment, and asset finance sectors to engage in insightful presentations, dynamic networking opportunities, and rich discussions on the latest industry trends and challenges, particularly focusing on the impact of conduct and regulation on the future of the sector.

Keynote sessions on regulation and conduct

Regulatory topics were at the forefront of the AFC UK Summer Conference 2024, highlighting the industry’s ongoing struggle with evolving compliance requirements and recent regulatory actions, notably the Financial Conduct Authority’s (FCA) review into historic motor finance commission arrangements.

Despite the regulator’s aim to enhance better customer outcomes, unintended consequences have impeded progress. For the asset and auto finance sectors, the regulator interventions are failing.

Edward Peck, CEO of AFC, emphasized the conference’s role in facilitating dialogue among industry experts to address regulatory issues from different perspectives. Peck stressed the industry’s responsibility to actively engage with policymakers, advocating for a balanced approach that protects borrowers from bad outcomes while fostering a marketplace conducive to good outcomes.

Delegates heard presentations on regulatory issues from a wide range of speakers, including legal experts from Shoosmiths, representatives from the Federation of Small Businesses, the Consumer Redress Association and brokers.

Martin McTague, National Chair of the Federation of Small Businesses (FSB), discussed the FSB’s super-complaint to the Financial Conduct Authority (FCA) regarding the use of personal guarantees by lenders for SMEs. The session underscored the importance of improving interactions between lenders and the FSB to ensure better outcomes for both customers and lenders, and emphasized the role of asset finance as a valuable financing tool for SMEs.

Simon Evans, Managing Director of the Consumer Redress Association (CRA), conversed with David Betteley about the role of claims management companies (CMCs) in bridging gaps in the consumer redress process. Evans highlighted the necessity for effective CMCs to follow best practices and collaborate with regulators, ombudsmen, and other stakeholders to achieve fair dispute resolutions.

Wayne Gibbard from Shoosmiths and Richard Dewire, Chief Revenue Officer at Alfa, discussed the industry’s responses to regulatory changes. They examined the unintended consequences of regulatory interventions and the need to balance regulation with innovation to maintain healthy market competition.

Specialised session streams

Moderated by John Rees from AFC, the Equipment Finance Stream focused on building sustainable asset usage models. Panellists Ed Thompson from John Deere, Ruth Glennon from HSBC Equipment Finance, Karima Haji from Scania, and Stuart Clarke from Lombard discussed the integration of IoT capabilities, new finance products for commercial vehicles, and managing transitions to sustainable models while maintaining profitability.

In the Auto Finance Stream, David Betteley led discussions on regulatory issues affecting the auto finance industry. Key topics included the FLA’s stance on commission disclosure and the FCA’s review of historical motor finance contracts. Following his recent trip to China, Auto Trader’s Ian Plummer gave an update on Chinese OEMs’ plans for the UK and Europe providing insights into opportunities for UK lenders, particularly in the EV market.

Christian Roelofs from Finativ moderated the Asset Finance Stream, where experts explored alternative broker business models and reward schemes. Lender-broker roundtable discussions tackled issues like technology’s role in business origination, future brokerage capabilities, commission disclosure, the AR model, and personal guarantees.

Highlight on resilience and endurance

A standout moment was John Rees’ interview with Nathan Mollett, Head of Asset Finance at United Trust Bank, who shared his experience running the Marathon des Sables, a 250km endurance race in the Sahara Desert. Mollett drew parallels between the traits needed for such a challenge and those required in asset finance business operations.

Workshops and new initiatives

The Next Generation Workshop, in association with the Leasing Foundation, featured a compelling speech by Philip White, Director of the Broker Hub, who spoke about resilience and managing adversity following his severe spinal cord injury. Philip noted that “tough times don’t last, but tough people do.” Delegates shared personal and professional experiences of adversity, fostering a deeper understanding of resilience in the workplace.

The FICO workshop, moderated by Nick Myatt and Richard Cowley, delved into AI’s role in the auto finance industry. They discussed how automated decisioning platforms can help manage regulatory risks, cost shifts to electric vehicles, and other market challenges by enhancing customer management and streamlining operations.

Rob Harris led the Broker Workshop, focusing on the transition from broker to hybrid lender. The session explored the increasing interest among brokers to become hybrid lenders, driven by market dynamics and regulatory pressures.

Trevor Pirie and founding members met at a closed-door session at the AFC Summer Conference to found a new modern-day Guild – The Guild of Business Finance Professionals. The Guild’s founding members, who represent independent business finance intermediaries throughout England, Scotland and Wales, united in their determination to maintain both their own and the independent positions of their employers, promote robust ethical, moral and professional business standards and maintain the best benchmark standards for providing intermediation services to corporate customers.

Guild members will strive to improve the understanding of the importance of their role in sourcing funding for corporate bodies, such that the real value of the services they provide can be more clearly seen by customers, lenders, ombudsmen, regulators and Government bodies.

Technology and industry debate

The afternoon sessions emphasised technology’s role in the asset finance industry. Jeff Lezinski, EVP of product management at Odessa showcased how machine learning can optimize lease renewals.

Steve Taplin from Lendscape and a panel of tech and change management experts discussed identifying operational inefficiencies within the asset finance industry and implementing appropriate technologies to solve the problems.

Nivo’s CEO, Mike Common, and Katrin Herrling from Funding Xchange highlighted broker technology’s role in enhancing interactions between brokers, lenders, and customers.

The conference concluded with the AFC Annual Debate on whether the industry should mandate commission disclosure. Chaired by Jason Hurwitz, sales director – Europe at NETSOL Technologies, AFC’s John Rees and Shoosmiths’ Wayne Gibbard argued in favour of the motion against AFC’s David Betteley and Finativ’s Christian Roelofs. Despite strong arguments from both sides, accompanied by audience questions and viewpoints, the motion was ultimately defeated, illustrating the complexity of the issue.

Edward Peck, CEO of Asset Finance Connect, noted that, “This was a serious debate which used the process and a bit of humour to defuse the topic – allowing people to hear the arguments without the politics.”

Asset Finance Connect’s Summer Conference was sponsored by Odessa (headline sponsor); Alfa (platinum sponsor); NETSOL Technologies (gold sponsor); FIS and Solifi (silver sponsors); Bynx (registration and refreshment sponsor); Lendscape (fintech innovator sponsor); FICO, LTi Technology Solutions and Sopra Banking Software (sponsor); Fignum and Nivo (exhibitors); Auto Trader (Data and Insights Partner – Automotive); and Shoosmiths (Legal Partner).