While there’s no sign the meteoric rise of financial technology (Fintech) will slow anytime soon, it also hasn’t disrupted equipment leasing and finance – yet. Frankly, this should come as no surprise to an industry that tends to fall behind the curve when it comes to the adoption of emerging technologies. For this reason and many more, there are an abundance of insights, lessons and opportunities worth keeping a pulse on moving forward.
Artificial Intelligence (AI), Blockchain and Smart Contracts are no longer trendy buzzwords wielded by Silicon Valley’s elite. They’re the pillars of the movement revolutionizing the way we do business. As distinguished by the ELFF, the question is not “can we work this way?” Rather, it’s whether or not we as an industry are ready to embrace the Fintech phenomenon – including the high-risk, high-reward reality of AI.
When it comes to AI, the looming dystopian fear is that robots will infiltrate the workplace, rendering human jobs obsolete. In reality, however, all signs point to the use of programmatic and cognitive AI capabilities to elevate employee performance – not replace them.
Still, there are plenty of more pressing concerns worth considering. Is present-day AI scalable enough to integrate with the key business processes that make a $600 billion industry tick? Remember, this is your data we’re talking about here. Not only the privacy and security measures that protect it, but also the way it’s hosted and managed. If you’re company is prone to data silo scuffles – or even a silo mentality among employees that restricts transparency across departments – the early adoption of AI could be detrimental to your business.
Furthermore, the equipment finance industry is ripe with regulation, and rightfully so. Keeping up-to-date with the latest compliance standards and protocols is daunting enough as it is. By entering AI into the equation, you run the risk of losing sight of responsibility if your system runs off the rails. In other words, how do we truly hold AI accountable?
On the other hand, the automation of monotonous tasks and the positive impact on operational efficiency that follows is nearly a surefire way to slash costs and amplify bottom lines. It’s already helped the banking industry make major strides in customer journey optimization and churn management through audience segmentation and targeted advertising. Better yet, it’s also proven to be an effective tool for fighting off fraud, money laundering and other financial crimes.
In 2016 alone, the financial services industry reduced sales-related costs by $15 billion and customer service-related costs by $23 billion through programmatic and cognitive functionalities. Although the process automation of redundant, time-consuming activities is attractive, cognitive AI’s attempt to mirror actual human thinking with natural language processing and machine learning still has a long way to go. For example, how effective is the chatbot on your bank’s website?
That being said, exploring the possibilities of AI and other emerging technologies is an opportunity to evaluate your company’s vision for the future. It’s crucial that organizations draw a definitive line between humans and machines, which makes finding the right tech partner at the right time and price all the more important.
Fintech is the clear-cut choice for today’s B2C banking experience. But the aforementioned risks still stoke great uncertainty and fear in B2B equipment leasing and finance companies. In fact, according to the ELFF Journal, “The most recent ELFA Business Technology Performance Index (BTPI) survey results indicated that one-third or less of industry players is actively reviewing these technologies.”
Although we shouldn’t rule out possible benefits for those who gamble on early adoption, the fear of missing out shouldn’t scare you into doing so prematurely if it’s not the right fit for your company. Ultimately, it all comes down to the functionality and experience you receive from your tech partner, and the amount of trust you’re comfortable with placing in them. All things considered, end-to-end platforms like ASPIRE that mix programmatic functionality with human oversight are still the most viable equipment finance solution.
So to answer the question, “are we as an industry ready for the Fintech movement – specifically artificial intelligence?” It all depends on your company’s DNA.