Sales financing - financing model of the future

Building the future - Digital flow business, Pay-Per-Use, FinTech Coopetition

Digitalization is also making its way into the leasing business. New technological possibilities and trends on the market are changing both business models and internal company processes. Established leasing companies in particular are presented with the challenge of keeping their finger on the pulse and continuing to offer their customers attractive value propositions.
Due to the increasing focus on the B2C market and the associated challenges, the highly standardized B2C mass business - digital flow business - is moving into the focus of many leasing providers. To build this business model efficiently and profitably, a high degree of automation of internal processes is essential. Unlike the financing of large-scale projects, this small-scale business cannot be subject to time-consuming and individual review and contract negotiation, so sales and risk processes and asset management in particular must be restructured. A particular success factor here is extensive self-service offerings for the customer - these should be designed in such a way that there is a balance between standardization and customizability in order to offer customers a model that is as suitable as possible on the one hand, and on the other hand to keep the degree of automation high and the maintenance effort low.
A new aspect of the existing business model arises from the trend toward making costs as variable as possible. The ever-increasing networking of production goods with one another makes the pay-per-use leasing model possible. Leasing companies have the opportunity to use their core competencies in the areas of operations and liquidity management and thus offer significant added value in the business relationship between the manufacturer and the user of the capital goods. Critical success factors for this are the establishment of consistent data models and the expansion of the IT and process landscape to include the Pay-Per-Use aspect.
The greatest competition in the current situation is represented by highly specialized FinTechs, which are pushing ever further into the market and offering customers special solutions for very specific problems. However, this development need not be seen as a pure threat, but also offers new opportunities, in the sense of FinTech coopetition. Here, established leasing companies and FinTechs with different specializations form strategic alliances in order to develop joint added value - with the focus always being on the benefits for the customer. For example, individual (sub-)processes, such as determining the creditworthiness of private customers, are taken over by the FinTech, or completely new business models, such as the joint development of leasing platforms, are developed. In this context, leasing companies benefit in particular from the technological know-how and the flexibility and specialization of FinTechs, while the latter appreciate the market knowledge and the size of the partner.

Basis for business - efficient IT and business processes

An essential prerequisite for the successful realization of these strategic directional decisions is a technical and process-related foundation on which far-reaching organizational changes can be built.

The new role of IT

The potential of the business models resulting from increasing digitization can only be leveraged if the technical framework is created by IT.
The increased requirements for automating business processes, even across system boundaries, represent a major challenge. In the digital flow business, risk assessments must be automated in the shortest possible time because the market does not accept decision-making processes for loans that take several days. The technical challenges arise from systems that have not had to communicate with each other up to now and between which, consequently, no interfaces exist today. Here, the targeted use of Robotic Process Automation can offer a cost-effective approach to bridge the necessary time for a rollout of modern, interconnected systems.
New business models such as pay-per-use also require IT in leasing companies to provide solutions for obtaining usage data on a wide variety of machines. Depending on the equipment class, this ranges from the transmission, storage, and use of data that is already being collected today to the need to develop solutions that capture this data from scratch. Regardless of whether as a leasing company in cooperation with the manufacturers of industrial goods or as a manufacturer itself, it is important to offer solutions that are easy to integrate into the equipment on the one hand, but on the other hand can reliably capture usage data and reliably transfer it to the IT systems for billing.
Coopetition with FinTechs requires the integration of external partners into the company's IT and presents them with major challenges. Possibilities must be created to integrate the new partners in such a way that the relevant data can be exchanged while at the same time protecting company-critical data and infrastructure. Exchange in the context of a cooperation often requires access to internal company systems in the entire process chain: depending on the cooperation, systems in the area of initiation, but also contract management or credit decision can be affected. Here, it is necessary to create suitable access options, for example, through an intermediate API platform.
Only by focusing clearly on these challenges can IT ensure that it can continue to provide cost-efficient services in the future and thus become a true strategic partner for the business.

An efficient business process model

An efficient business process model not only offers cost-saving potential, but is also an often underestimated success factor for future business development in new products and/or new markets.
Leasing companies face very specific challenges in increasing process efficiency and standardization. On the one hand, different products and product variants, e.g. in flow and non-flow business, are very heterogeneous in terms of processes; on the other hand, aspects specific to business models, such as asset management, usually still require a high level of manual work.
Process efficiency requires a complete and up-to-date overview of operations as a basis. This requires regular reviews of the process model to ensure that it is up to date, comparisons with current market standards, and the cyclical evaluation of automation potential. At the same time, a clean process landscape is a pillar for successful strategic corporate development. In our experience, processes in the areas of new customer onboarding, contract creation & activation, cash and asset management, and loss mitigation in particular often hold great potential for increasing process efficiency with the appropriate measures.
For internationally operating leasing companies, the question usually arises of how to bundle as much of the operations as possible in a shared service center in order to minimize costs in operations on the one hand and optimize the "time to market" when opening up new markets or introducing new, global products on the other. The timeliness of the business process model is a prerequisite for this. The degree of possible centralization is determined by the homogeneity of the business processes in the various local units.

Bolster your company - business unit development and control model

Successful product launch - easier said than done

In our experience, the introduction of new product categories is an enormous challenge for the entire organization. These projects are lengthy and require a coordinated approach from a wide range of organizational units, some of which have very different working methods and incentives. What is needed here is strong project leadership, equipped with decision-making authority and the internally visible support of senior management.

Take your key figures into the future

Organizational development and the pursuit and achievement of strategic goals must also be reflected in the management model used. Based on the new circumstances, the key performance indicator framework used, the incentivization of employees and the organizational rules and regulations must be kept up to date. Detailed information on this can be found here.

Checking the achievement of strategic goals requires explicit strategy controlling - detailed information on this can be found here on our website.

Temporary co-pilot - How we support you as 4C GROUP

How do you manage all this? Best not alone - but with an experienced co-pilot who knows the route exactly. We support our customers with our years of experience in the leasing industry, in digital transformation and in project management. For our customers, we ensure the effective and efficient implementation of e.g. transformation, digitalization and efficiency enhancement projects.