Technology & Innovation Forum – “Speed to Decision”

The September meeting of the Technology & Innovation Forum began with some testing of a hypothesis that says that tech investment in the Front-Office can be more effective and more transformative than essential, but less differentiating, Back-Office spend. The participants seemed to agree, with 72% of them putting Front-Office ahead of Back-Office, Collections, Remarketing, Accounting and other areas, as providing the greater transformation opportunity.

The discussion then moved to the importance of performance measurement in the Originations and the delegates were asked their view on the importance of “Speed to Decision” as a KPI. Nobody regarded it as unimportant and 69% told us that this KPI has a high priority in their business.

Asked where they saw barriers to improving the speed of delivery of credit decisions, whilst Data, People and Processes were all identified as needing improvement, nearly half of those present voted for tech as being the biggest current hurdle.

The group was then asked how these barriers manifested themselves in daily business, and the conversation became quite candid, with some regular, key contributors openly sharing the challenges they faced in the processing of customer proposals, whereby it quickly became clear that these challenges were common across the entire community, namely:

• Data entry, consistency and validation
• Manual intervention and rework to complete missing information
• Gaps and inconsistencies in communication between stakeholders along the proposal journey, both internal, (sales/sales-support and credit), and external, (brokers/dealers and customers)

Whilst there was also consensus about the fact that some factors are tied to the nature of the asset finance sector and the broad scope of customers as SMEs, varying from owner-operators to sizeable companies with more complex corporate structures, the discussion then shifted to where solutions may lie, which included:

• Increased automation of data-validation at the point of entry
• Greater technical integration with external/third-party databases
• Improved visibility of a proposal’s status and slicker communication between relevant stakeholders to remove blockers and minimise delays

Another area of consensus was the subject of measurement, or rather, the lack of it; and if process measurement was occurring, then the lack of automation. Proposal submission-, accuracy- and progress-KPIs, together with the same around credit decision and the speed thereof, were seen as critical, not only in terms of internal process performance, but also as key to providing feedback to brokers/dealers. Such objective feedback mechanisms were seen as a means of improving data-loading efficiency and reducing errors, increasing the speed and accuracy of credit decision, as well as positively impacting overall business quality.

Many participants saw the business benefit in being better able to manage brokers/dealers with data identifying poor-quality submissions, resulting in unnecessary rework; they agreed that there is an argument for better service to brokers who provide high-quality, efficient business, but they also saw the initial priority as increasing the speed of processing new business and improving the quality of service to all.

Finally, the session returned to the challenge of balancing front-end and back-office investments, emphasizing enhanced customer- and partner-relationship management at the front end, where the business case for technology investment is often clearer, prioritizing data-driven initiatives and highlighting the need for measurable outcomes to build a strong business case. This provided a neat point to end the debate on “Speed to Decision” and almost certainly identifies an ideal start to our deliberations on “Speed of Payout”, next time.

The Technology & Innovation Forum is a community of tech experts, non-tech influencers, and technology decision-makers, specifically for individuals working for motor and asset finance providers. By joining, you’ll be a part of an exclusive group dedicated to driving digital transformation in the finance industry, providing the opportunity to network with like-minded professionals, share ideas, and stay ahead of the curve.

The Technology & Innovation Forum is open to AFC’s lender corporate members. To learn more or register, please contact Ariana Pragana at arianapragana@assetfinanceconnect.com.

Not yet an AFC corporate member? Get in touch with AFC’s Business Development Director, Joe Nilsson, at +44 (0) 7379 096 111 or joenilsson@assetfinanceconnect.com.