It was our honor to represent Accenture at the 2019 Eurofinas & Leaseurope annual conventions last month in Budapest and facilitate the panel, “Making Online Platforms Work”.

As we explored the impacts of the digital revolution on auto and equipment lending and leasing with other industry leaders, we were struck by five key developments:

  1. The level of adoption of digital capabilities—now critical levers for growth and transformation—has changed the way many auto and equipment financing companies see themselves. Some now consider themselves technology rather than financial service institutions.
  2. Clusters of players, all relatively advanced in their digital transformation journeys, are beginning to emerge. These clusters are not necessarily correlated to the size of the players involved, nor are they homogeneous within their respective geographies. However, we see Nordic companies emerging as pioneers in digital transformation. We also see that more digitally savvy auto and equipment finance companies tend to invest more in their transformations than slower-moving competitors do. 
  3. Speed is becoming a competitive advantage in digital transformation. As new operating models are implemented, successful companies keep their businesses running effectively while switching over.
  4. There is a healthy mix of investment in value-enhancing use of data analytics balanced with a refresh of core banking changes. Both are central elements of digital transformation.
  5. We see increased penetration by new market entrants using new business models that leverage existing retail or corporate third-party lending and leasing platforms. 

These trends were clearly illustrated in our panel. Peter Niesink, director general of BOVAG, discussed how his company rapidly increased its market share with a used car platform for its members. Roberta Campanelli, general manager of BCC Lease, talked about how they consider themselves a tech company now with all leasing business performed in partner-specific digital portals and with about 20 percent of their staff working in digital. Priit Poldoja, chairman of Inbank, shared how they have significantly increased their share of the leasing market and expanded reach through work with digital banks.

In our experience, the investment required to shift to a digital lending and leasing platform model is money well spent

However, some shifts are happening more slowly than we would have anticipated. We are only seeing the earliest signs of industry players creating ecosystems of fintechs and regtechs to enrich their value propositions and speed their shift to digital, and we are not yet seeing the value provided by auto and equipment finance players recognized in the Open Banking models created by their parent companies.

In our experience, the investment required to shift to a digital lending and leasing platform model is money well spent. It is important, especially for those international players who have to make the shift for each country, to coordinate transformations in the direction of efficiency and long-term cost reduction. According to our report, Caterpillars, Butterflies, and Unicorns: Does digital leadership in banking really matter?, the banks with the sharpest digital focus are generally better at extracting more revenue from their assets. Where they really excel though is on cost efficiency and in moving closer to their competitors through cost improvement while maintaining their revenue advantage.

We’d like to continue the conversation and learn more about how your team is making the pivot to digital. Please contact either of us to connect and discuss these concepts further.

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