In this last of three posts on tips for selecting the right asset and equipment financing platform for your business I want to focus on the future. I think we all wish we had a crystal ball that would help us understand what business trends will turn into mainstream business practices down the road to guide better investment in the right long-term solutions. But since this does not exist, the next best option is partnering with a technology company actively evaluating technology to make sure the platform you invest in today will be relevant technology as the overall industry evolves.
Look for a solution provider in touch with industry changes
The asset and equipment financing industry will continue to face regulatory, technology and competitive changes which will have a direct impact on your business and the business of your customers. For example, the recently imposed Financial Accounting Standards Board’s Accounting Standards Update (ASU) 842, impacting the treatment of operational leases, has a direct impact on the balance sheet of your customer. With the impact of this regulation, I am sure most financing software providers have addressed this at an application level. But when it comes to smaller, more nuanced changes, it is important to know that your software partner and their solution is up to date with new regulations and accounting standards. A good test is to see how active your software partner is within the industry. Your software partner needs to provide solutions that your business needs today and be on the forefront of emerging market trends to support your business in the future.
This becomes even more critical in light of potential significant innovation in ownership and asset tracking through technologies like blockchain or the ability to execute a contract using legally binding digital signatures. Innovation like distributed ledger (blockchain), encryption, digital signature, and artificial intelligence will all have an impact on our industry. Is your technology partner actively working to deliver this capability into your asset and equipment finance platform? We touched on the topic of AI in a previous blog post – Will artificial intelligence replace leasing professionals?
Look for a proven finance product, not just a consulting service with a collection of software tools.
This one gets a little tricky. The finance software industry has grown up as a service model, so many vendors have a strong professional services organization able to deliver a highly customized deployment. While this model may have worked for organizations in the past, this came with the increased ongoing maintenance costs and challenges when upgrading to new software releases. This model has been replaced with a more modern product-based approach. With modular based open architectures and ever-increasing web extensibility through application program interfaces (APIs) or web services, the days of bringing a collection of code and then cobbling a solution together are gone.
Modern software deployments should have the majority of functionality needed out of the box or over the internet in the case of cloud deployments. The solution should not require significant customization and should be designed to allow you to use the level of functionality applicable for your business today, while having proven capabilities to support your business in the future. If the solution you are looking at is “product-first”, then you should be able to get started with a reasonable on-boarding engagement to ensure integration across your ecosystem and alignment with your business processes.
It is my hope that these blog posts have provided some insight for you as to how to best select an equipment and asset financing software platform. These posts have come from our work with customers of all sizes across the globe who are looking to maximize their investment in a leasing and loan software platform. If you have any questions, please feel free to contact us. We would love to have a discussion on your needs for the coming year.
Katie Emmel, Chief Operating Officer