The 14th annual Leasing Life conference and awards saw senior leaders in the European leasing industry join for a day’s discussion on the impact of a changing marketplace – notably subscription and service models. Christopher Marchant reports.
The Leasing Life conference and awards event was based on three pillars fundamental to leasing; taking in insights from adjacent markets, the external factors driving transformation, and opportunities for internal optimisation.
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This year’s conference also explored how Europe’s leasing industry is responding to the value chain opportunity – the operational, and strategic, implications of the paradigm shift, and the role that technology must play in transforming the industry so it thrives in the digital age.
Of particular relevance to the motor finance industry was discussion on the need to move to more dynamic online consumer models.
As the dealership increasingly risks being circumvented in the retail process, it is up to finance providers to creative intuitive online experiences.
This may also need to be coupled with an ease of access that matches that experienced by younger demographics through platforms such as those provided by Amazon, Apple and Netflix.
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By GlobalDataAs numerous senior industry figures pointed out at the event, as an industry becomes more highly regulated, a smooth customer experience can also become increasingly difficult.
Brendan Gleeson, group chief executive officer at White Oak UK, said: “You’re in a business world where you can’t forget your traditional customer base. What percentage of your business comes through a digital channel today? What’s coming through the dealer channel? You have to do both. It is difficult for any organisation that has a long history to take itself from its existing position and transform itself in an agile operation.”
On issues of how digital transformation might affect the industry, John Rees, chief commercial officer at Société Générale Equipment Finance, said: “It becomes a question of whether we are focused on today’s customer or are we focused on the customer base in 15 years’ time, which will be a different generation of people working in a different way.
“On the other side of this debate, I’ve got a young colleague in my team who has no interest whatsoever in owning a car. If we try and incentivise him saying: ‘Soon you’ll be eligible for a company car,’ he’ll say: ‘I don’t want a car, I have a car subscription.’ We all need to be prepared for this kind of market shift.”
Bas van Asseldonk, executive vice-president for Europe at DLL, was one of a number of speakers to identify the lifecycle approach as another important process of change.
It is becoming clear that fleet managers and finance providers need to be looking beyond simple new and used car cycles, and assessing the viability of every vehicle from the point of leaving the factory floor to the requisitioning of its parts.
This recycling also links to the need to reduce carbon emissions, a sustainability trend that was identified as a key plank of the business platform for Patrick Beselaere, chief
executive officer at ING Lease Belgium.
This included an increasing desire to fund green projects, including electric and ultra-lowemission vehicle fleets. ING’s position can be evidenced by its use of a sustainable improvement model in certain funding arrangements.
In this, if the perceived sustainability of a company goes up via a rating system, the interest rate goes down accordingly.
In his macroeconomic overview, Rees also identified rising interest rates – both in the UK and impending in the EU – as something of which all lessors needed to be keenly aware. In addition to potential market uncertainty on the UK leaving the EU, this combination of factors could contribute to a rise in defaults.
Even outside immediate political events, Rees established that the era of relative stability in the 10 years following the financial crisis may be coming to an end. Emerging technology was the dominant theme at the Leasing Life awards.
Nowhere is this more relevant than fleet leasing, where vehicles remain attached at consumer level to a dealership model that has existed since the 1950s, and a B2B approach that, out of necessity, needs to make a shift to cleaner vehicles amid changes in government and public perception.
Yet the ability to identify issues has led to an ability to approach possible solutions, and with preparation there is still nothing to suggest that 2019 should not be a year of innovation and success.
