Leasing software forecast: More clouds, with a strong chance of SaaS
By Carla Young Harrington, Susan Carol Creative
Software-as-a-Service (SaaS) offerings and cloud hosting are strong currents continuing to shape equipment leasing and asset finance software developments as we edge closer to the year 2020. Recent enhancements and those planned in the coming year also reflect important financial services trends, technology shifts and new regulatory requirements underway.
Several leasing and asset finance software providers cited rising interest in SaaS options as a key business driver. Interestingly, the “as a service” movement is also affecting lessors and lenders in their core businesses. More of their customers are favouring products-as-a-service and requesting subscription payments. Often the payments are bundled to cover equipment and related services.
More major leasing software companies have announced new, cloud versions of their flagship products, joining other providers that are already “in the cloud.” Some providers are also in various stages of incorporating artificial intelligence (AI) and newer technologies into their products, as well as supporting important industry initiatives fuelled by advances in technology.
“This will be a year of disruption with technology changes, and the connected car is an example,” said Mark Binks, General Managing Director of Bynx. “We have been supporting this but there are more telematics data from vehicles that can be incorporated. We will also be looking into building AI into some of our apps where relevant. Blockchain should also be big for the industry, as it will bring the ability to transact business using blockchain ledger. And we should continue to see a big push to support car sharing and carpooling.”
Another software provider preparing to increase support for subscriptions and ride sharing is White Clarke Group. “(Our) Innovation Lab experts are predicting that the rise of autonomous vehicles will see a further decline in traditional finance and drive a greater shift towards subscription services and car sharing schemes,” added Brendan Gleeson, Group CEO. “Whatever the future brings, customer demand for flexibility to rent, share and subscribe to vehicles is growing and that’s why we’re developing our products to meet the needs of these emerging marketplace opportunities.”
These technology developments are seen as game changers but so too is customer demand for software capabilities unconstrained by technical boundaries. Chris DeVeney, Business Development Manager of LTi Technology Solutions, formerly called LeaseTeam, noted, “The inspiration for (our) development is the growing need of business to have technology available electronically, across any device, on demand. Additionally, there is a growing interest to see how artificial intelligence can solve existing business challenges.”
Predictive analytics is another priority for some leasing software providers. “The finance industry is rarely on the forefront of technology, but this year we made predictive analytics a more important part of our offerings. This allows clients to truly use their data to improve their businesses in ways never before considered possible…,” said Sean Scampton, Director of Sales and Marketing for Leasepath.
For software providers, the quest to keep pace with changing technology, industry trends and compliance issues is not an easy one. But companies that succeed will be the winners.
“The renewed resurgence of financial technology and demand for digital transformation in the financial services industry has everyone racing to adopt new technologies and industry standards just to stay relevant,” explained Aysha Ellis-Aziz, Global Marketing Manager of NETSOL Technologies. “This has raised the competition level and companies are striving to innovate to adopt the latest trends to stay ahead of rivals.”
In addition to addressing long anticipated lease accounting changes, one major regulatory challenge that software providers have been responding to is the General Data Protection Regulation (GDPR) on data protection and privacy for individuals within the European Union. The GDPR took effect in May 2018 and software providers have been updating their products to manage requirements stemming from the new law.
Notable changes required by the GDPR include the right of data erasure, or the right to be forgotten, for data subjects; a set of technical measures that companies must implement, including pseudonymisation and encryption; and a new accountability principle that requires organisations to demonstrate and document their compliance, said Steve Taplin, Global Sales Director and Digital Lead of Alfa Systems.
Recent software developments
Leasing software providers surveyed for this article provided insights on a variety of recent and planned product changes. Based on their comments, progress should continue to be made with cloud offerings, subscription services, predictive analytics and AI-powered enhancements such as chatbots in the year ahead. Several companies anticipated stepping up investments in application program interfaces (APIs) for smoother integrations with third-party applications. At least two mentioned interest in blockchain ledgers.
For a number of providers, upgrading the user experience continues to be a major priority. This is hardly surprising given that front-end enhancements have been an area of focus for some time. Increasingly, equipment finance companies and their own customers – end users – want to use leasing systems just like they do other technology, from their preferred devices and browsers with the option of intuitive self-serve capabilities.
The following information provides more detailed insights on the development plans of individual software providers.
LTi Technology Solutions, formerly called LeaseTeam, recently unveiled upgrades including a new user interface and portal access the company considers its next generation framework. Among other updates, the company added a DocuSign option for a more streamlined signature process; updates for compliance with US and IFRS lease accounting standards; depreciation report enhancements to its ASPIRE reporting suite; bank funding module enhancements providing greater flexibility in the syndication process; security and administrative updates; JobStream enhancements; and additional API tools for greater extensibility, according to DeVeney.
In the coming year, LTi Technology Solutions plans on investing in AI and introducing an enhanced business rules engine that allows lenders to set up and process unique and complex workflows across channels, vendors and products. Other upgrades should include greater integration with Salesforce Exchange apps and email systems, and a customer portal that is device and browser “agnostic” for managing the origination process and back-end servicing tasks.
Alfa Systems reports that many new customers have opted for secure hosting in the public cloud versus an on-premise install. “Our cloud customers enjoy the cost benefits of outsourcing their systems requirements, with Alfa Systems running on external infrastructure provided by trusted third parties and data being held off-site,” Taplin said.
Among other enhancements, the company has added selfserve, customer onboarding and mobility capabilities as well as notable changes required due to implementation of the GDPR. In the US, a preconfigured version of Alfa Systems for the automotive finance sector has helped compress implementation time for ongoing projects.
In 2018 the company plans to continue investing in its API catalogue, Digital Gateway software and reusable user experience components.
NETSOL Technologies has equipped its next-generation platform, NFS Ascent, with enhancements designed to help financial organisations with cybersecurity, entry barriers for small and midsize enterprises and other challenges. The company has integrated third-party vendors in different countries to provide open API tools, collaboration tools, payment gateways, customer relationship management (CRM), facial recognition tools and other capabilities. Utilising these specialised, targeted APIs is helping businesses in the finance and leasing industry develop innovative solutions for real world problems, according to Ellis-Aziz.
Other third-party vendor solutions have also been integrated into the product, including e-contracting, e-payment, self-service and AI-based solutions.
“We foresee a lot of business volume in enterprise digitisation in the near future…” she added. “(We are) focused towards making the customer journey better, providing technological advancements such as the new and improved database based on blockchain technology, AI, big data and other such progressions.”
Banqsoft, a provider of financial software in the Nordics, recently updated its View21 platform with open APIs to help customers adapt to new Open Banking opportunities. APIs facilitate smoother integrations and access to third parties, making it easier for financial services companies to embrace new business opportunities.
Among additional enhancements, self-service solutions were extended to include 24/7 online applications and MyCar pages, where end customers can manage their own contracts. Banqsoft also updated the offering to include an application service provider (ASP) or SaaS delivery model, recognising the industry trend toward subscription-based products. A number of existing customers have been implemented on the new model to reduce time spent on technology matters and focus more on their core businesses, noted CEO Terje Kjøs.
“Our 2019 plans will continue focusing on increased process automation as well as a modern interface for financial services providers, based on responsive design and user experience. The workflows will be highly simplified in order to reduce time for on-boarding of new employees and improve efficiency…,” Kjøs said.
Leasepath introduced a number of updates including integration and dashboards with PowerBI, which the company considers one of the most powerful analytics tools on the market, Scampton said.
The company has also added score carding, supporting weighted scoring for any opportunity that comes into the system, with full auditing and overrides built in. Securitisation has been another area of focus for Leasepath, which is developing new mechanics to allow funders to package and sell contracts that have been originated through the system. Scampton predicts securitisation will become more and more commonplace in the market as it can help finance companies reduce exposure and earn commissions on deals that no longer fit into their portfolios.
Looking ahead, the company plans to add auto decisioning capabilities as a natural extension of automated scoring, pursue more integrations with critical data sources and introduce an upgrade of its partner portal origination tools.
White Clarke Group launched a fully out-of-the-box, cloud-hosted version of its CALMS automotive, consumer and asset finance software. Among recent product enhancements, the company added customer direct and self-serve channels and an updated user interface, open-API technology for more seamless integrations with third-party applications and improved multitenancy architecture. White Clarke Group also has made additional investments in e-signature and e-identity capabilities, according to Gleeson.
Important product updates are expected in the year ahead. These include enhancements to the lease and loan accounting module, with specialised functionality for the pan-European, US and China markets; an AI/chatbots tool that customers can use for their own customer service; and car sharing and subscription enhancement.
“Customers have increasingly sophisticated expectations of what technology should do for them,” Gleeson said. “Gartner reports that consumers will manage 85% of their total business associations with banks through chatbots and virtual assistants by 2020…. That’s why our innovation lab is working on further development of AI driven chatbots and support bots, which connect to existing finance solutions and customer support channels and use machine learning and natural language processing to help free up time for customer service teams to get back to being more human.”
Oyster Bay Systems’ recent upgrades include the Vienna API, which provides a standard integration interface across the lending platform to reduce time required to develop and deliver new functionality and implement third-party integrations, noted Operations Director Martin Breach. A new self-service portal supports multiple devices and browsers to give the company’s customers a way to offer their own stakeholders self-service capability. Other updates include GDPR enhancements, a web reporting module for bespoke reports, support for wholesale funding, and metered billing facilities that allow companies to invoice usage-based fees alongside normal rentals.
“‘Power by the hour’ ‘is a response to the need for flexibility in funding complex assets with unpredictable use and depreciation. It is ideal for heavy transport, specialised plant or similar assets,’” Breach explained.
In the year ahead, Oyster Bay Systems plans to enhance its fleet management subsystem with increased support for subscription services, and work on extensions of its API and credit gateway.
Sofico expanded its product offering with a cloud-native microservices architecture and decision support framework, called Miles.next, beginning the first customer projects based on it. The new framework was in response to distinct industry trends.
“We believe the automotive finance and leasing industry is at a crossroads considering the rapid evolution towards connected, autonomous, shared and electrified vehicles. Adding multi-modal mobility trends and fintech disruption to this mix, we believe there is an important challenge – and opportunity – for our customers to play a broader role as true mobility aggregators,” said Chief Technology Officer Piet Maes. “Digital self-serve channels with end-to-end online customer journeys will be a key enabler to bridge contracted vehicle usage with user-centric, value-added mobility and connected car services to orchestrate a broader and more complex supply chain of multi-modal mobility services.”
The company’s focus in 2019 is on leveraging Miles.next to help customers manage subscription models and car sharing, aggregate multi-modal mobility services and implement data driven decisioning through descriptive and predictive analytics.
Bynx product enhancements have been driven primarily by compliance and inspection requirements. In addition to GDPR-related updates, lease accounting changes were a priority, noted Binks.
The company also worked on mobile apps for damage inspection and other processes, and introduced a driver self-inspection module for grey fleets where employee vehicles are used for company business. The module can be configured to capture important data such as whether the vehicle is insured and road worthy.
The coming year should see a shift in development priorities for Bynx, which serves vehicle leasing, fleet financing, ridesharing and carpooling companies. The company anticipates providing enhanced support for connected cars, car sharing, carpooling. It is also looking into AI mobile apps and blockchain.
Cloud Lending, a Q2 company, which has offered SaaS, cloud-based systems from the start, has focused product development on allowing lessors to implement streamlined fintech practices for managing their end-to-end operations including credit and underwriting, lease servicing, asset management and collection of delinquencies, said Mukul Mittal, Vice President of Industry Solutions.
Recent product updates include improved credit and underwriting, additional integrations for sales tax and property tax, and enhanced accounting for non-performing contracts and sale of contract including debt schedule. In 2018, the company plans to enhance its leasing solution’s asset management capabilities, streamline billing and cash management, and upgrade the dealer portal, Mittal added.
In October 2018, Q2 Holdings, a provider of digital banking solutions, acquired the company.
International Decision Systems’ global launch of IDScloud, a SaaS option for its lifecycle management solution, made news in 2018. The introduction included a consumption-based pricing model, making it more accessible to small and mid-market lessors. This emphasis will continue through 2019 as the company introduces additional web-based integrations, said Kristie Kosobuski, Senior Director of Product Management. The company also announced InfoLease updates including asset level billing, which improves management of complex invoicing and payment receipt, and the product’s continued evolution to become more open and extensible with an API-driven architecture.
The company is watching several trends impacting the global asset finance and leasing market. As the market aims to comply with new accounting regulations globally, IDS has released supporting updates within the current platform.
Blockchain technology is also a hot topic. “A fully open blockchain will take some time to materialise based upon the need for agreement between financial institutions and central banks, but in the immediate future, we will see this technology gain momentum within smaller ecosystems. Digital signature and digital signature regulations will continue to be an early enabler of blockchain technology. IDS will continue to develop solutions and integrate with best-of-breed vendors to address these new forms of asset transfer and contract management,” Kosobuski noted.
Liscor, part of the Lutech Group, has expanded the capabilities of its finance software for managing leasing, loans and non-performing loans. Chief Sales Officer Giuliano Gaviraghi said new business process management (BPM) capabilities are helping customers govern complex business networks and make process improvements within their organisations.
The company in recent months also introduced a cloud-enabled solution, Web 2.0 responsive user interface, electronic document management and e-signature features, user-experience (UX) driven design and enhanced delivery of rich-media content to mobile devices.
While 3 Step IT is not a traditional leasing software provider, it offers relevant services and insights. The company specialises in IT lifecycle management services. Its clients come from all industries, typically with 150+ employees. Its lifecycle services are based on embedded proprietary software, called Asset NG, which helps to manage leased assets through their life. As part of its business, the company partners with the IT channel, lessors and asset finance companies to offer services to end users. Some of its leasing and asset finance partners are customers, too, said Nick Gallop, Vice President of Group Marketing.
The company recently completed a major refresh of Asset NG that improves the user interface and makes the software easier to use, especially for smaller clients who may not use it as frequently as other users. 3 Step IT is also releasing a series of new APIs to link the company’s asset information with corporate asset management and logistics systems. This development provides many opportunities to build new, and extend current, partnerships with the IT channel and lessors.
What technology and business trends are driving changes the company is introducing? “Digitalisation, partly for our own efficiency and partly to improve the user experience. We’re trying to make lease transactions frictionless from beginning, when equipment is acquired, to end, when it is disposed of,” Gallop added.
Pace of industry digitalisation
Software providers are stepping up their game in response to customer demand, industry initiatives and technology advances. But how is the equipment leasing and asset finance industry doing overall in terms of digitalisation across the business?
A recent benchmark study of lessors representing a variety of industry sectors in Europe, the US, Canada and Latin America shows digital implementation efforts are widespread but still lag behind other financial services sectors. “While the industry has widely discussed the need for transformative change, digitalisation has been incremental for most and transformative for only a few,” concluded The Alta Group consultants who worked on the study.
One major reason cited by 75% of survey respondents: organisational issues. Companies that are succeeding, the consultants also observed, tended to focus on observation and collaboration at various levels of an organisation, not on traditional top-down directives.
It appears efforts at change management may be an important but often overlooked factor in harnessing the power of software systems available today.
About the author
Carla Young Harrington is a Senior Associate with Susan Carol Creative (www.scapr.com). She has reported on equipment finance and technology for more than 20 years.
Carla Young Harrington
Susan Carol Creative
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Tel: +1 540 479 7835