If you are wondering what 2020 possibly has in store for equipment lending and leasing companies, here are my top five predictions based on new market and technology trends now on the horizon.

1. The rise of the digital workforce

The pivot to the future will likely bring an increase in both the digital share of the workforce and the gravitas of digitally focused roles in the operating model. This isn’t simply a matter of generational change as more digitally savvy Millennials rise in the ranks. It’s more about leadership at equipment finance companies, some with legacies measured in centuries, recognizing the competitive advantage to be found in transforming to become a data-driven business and securing the expertise needed to make it happen.

For example, Roberta Campanelli of BCC Lease in Italy told us on a panel in Budapest in October that her company, which has its origins in the 1800s, now considers itself a tech company and performs all its leasing business digitally with about 20 percent of its staff in digital roles—half of those being data scientists. Roberta herself has a statistician’s background and has helped drive the company on its digital journey from the beginning.

2. Industry players square off for a data tug-of-war

There are three big healthcare networks in the Chicago area. Recently one of them realized, thanks to their analytics capabilities, that a lot of their scanning equipment sat idle much of the time. The business decided to run a special: for $50 they would scan anyone’s heart—no insurance needed or accepted. While they knew this essentially at-cost offer wouldn’t yield much immediate profit, they saw opportunity in filling the equipment’s idle time with an attractive offer for new customers. Soon after, the other two big providers began to offer the same deal.

The value of aggregate equipment-usage data and its potential for first-mover advantage will soon become clear and more easily monetized…

This is an example of how aggregation of equipment usage data across multiple locations can give first-mover advantage to one service provider over another in a competitive marketplace—but who actually owns that usage data if the equipment is financed? Does it make a difference if the equipment is leased or financed through a bank or captive lender? If the manufacturer maintains a connection and provides ongoing software updates, does that change the data ownership dynamic? The value of aggregate equipment-usage data and its potential for first-mover advantage will soon become clear and more easily monetized, which will lead industry players to square off in a virtual data tug-of-war to own or control it.

3. Equipment-as-a-service to gain end-user appeal

As more industries grow more comfortable with all things digital, equipment-as-a-service will likely become increasingly appealing to end-users. Consider that the number of modern independent farmers has contracted for decades due in large part to the ever-increasing cost of efficient farming equipment. A co-op model can reduce equipment costs by allowing groups of farmers to share the costs, spread out the risks and insurance, and utilize equipment only on an as-needed basis. An equipment-as-a-service subscription model is the next evolution of the co-op, and as autonomous equipment that can operate unattended around the clock comes to market, farmers may see that as an opportunity to rest easier.

4. Digital subsidiaries come of age

For certain equipment finance companies, going digital was less about transformation and more about expansion. The challenges of digital transformation led some industry incumbents to launch all-digital subsidiaries with the idea that the subsidiary would ultimately exceed the performance of the legacy business. It’s been a sound strategy for some, and as these subsidiaries mature, we’ll likely see more traditional firms that have not seen the hoped-for returns on their digital transformations start to consider this model.

5. The digital divide of equipment finance will become more evident

With everything from holiday shopping to medical appointments happening online, digital services are now ubiquitous in the lives of consumers. The progress made by digital leaders in equipment finance notwithstanding, the industry as a whole has not kept pace with the digital economy, and the perceived digital divide between equipment finance companies and their customers will only become more apparent.

I’m now working with my colleagues here at Accenture to help bring you and your team more data and insights to help you narrow the digital divide between your company and your customers in 2020. Stay tuned for more.


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