Emerging technology in the equipment finance industry (part 2 of 2)

Unlocking the power of big data: What is it, why should I care and how is it used in equipment finance?

Everybody’s talking about the value of big data, but if you’re struggling to understand how to capitalize on that valuable information, you’re not alone. Many people don’t fully comprehend the magnitude of big data so this post is a brief introduction to what is big data, why you should care now and how to use big data to grow your equipment finance business.

What is big data?

Solifi (formerly IDS) recently partnered with one of the industry’s big data experts, Data Scientist Angelina Frimpong from AMUR Equipment Finance. She and Solifi’s own Chief Technology Officer (CTO) Eldon Richards were panel members at National Equipment Finance Association (NEFA)’s Virtual Exchange webinar and networking event in February 2021. They both shared their perspectives on emerging technology in the equipment finance industry – including big data.

The 5 Vs: Characteristics of big data

Source: Angelina Frimpong, AMUR Equipment Finance

According to Frimpong, big data is characterized by the 5 Vs.

  • Volume: Huge amount of data
  • Variety: Different formats of data from various sources
  • Value: Extract useful data
  • Velocity: High speed of accumulation of data
  • Veracity: Inconsistencies and uncertainty in data

When we talk about big data, we’re not just talking about its volume and size (although that is part of the five characteristics). Big data also encompasses intelligence coming in different formats from various sources such as including machine data generated by sensors installed in industrial equipment, transactional data both online and offline (e.g., invoicing which is later entered into a system), and social data that comes from the likes, tweets, comments, video uploads and general media that are uploaded and shared. And not only does it validate the integrity of the data, it also extracts what’s useful.

And big data does it fast. Faster than humanly possible.

Why should I care about big data?

Source: Angelina Frimpong, AMUR Equipment Finance

Why big data? And why should you care?

Those are valid questions. The main benefits of big data according to Frimpong:

  • Make smarter and more efficient business decisions
  • Reduce costs
  • Optimize business operations by analyzing customer behavior
  • Seamless transition to the next generation of emerging technologies, products and services

The majority of attendees (75%) at the NEFA Virtual Exchange webinar in February expressed that digital platforms would be key in winning in the new normal as we emerge from the pandemic. And that they were already developing a strategy to be a leader and connect with customers in new ways. This means the majority of decision makers in equipment finance are ready to invest in digital transformation to ensure business growth.

And what you gain from digital transformation is big data – a look inside a customer’s buying behavior, ability to predict risk that goes beyond a credit score, assess their buying power, create a better customer experience, reduce costs, optimize business operations, set up for future success, and much more.

How is big data used to grow business in equipment finance?

Source: Angelina Frimpong, AMUR Equipment Finance

The term big data is thrown around a lot these days and while we know information is what should drive business decisions, what are the practical applications when it comes to growing business in equipment finance?

From Frimpong’s perspective, the four main practical ways for equipment finance to benefit from the value of big data include:

  • Generate leads
  • Analyze customer sentiment
  • Predict risk
  • Automate credit underwriting

One example she gave is how big data can augment your current CRM and portfolio management tools. You can see from the customer’s historical data that they leased equipment from you about two years ago. And you also notice that this customer visits your website frequently. What exactly does he want? We can certainly make assumptions, but we really don’t know without data. Big data takes in customer’s patterns on the website and extrapolates the data to make a predictive analysis, better understand customer needs and provide custom recommendations based on what the data tells us.

Why should I care about big data now?

Four waves of the Industrial Revolution: The full impact of the 4th wave, cyber-physical systems, will arrive within a generation – in less than 25 years.

You know the saying, the future is now. It’s never been truer than today. Looking at the four waves of innovation in the timeline, we are moving out of the third phase, and not only dipping our toes into what’s next in the 4th industrial wave, but, in some areas, taking a deep dive.

So why is big data such a big deal right now?

Macro trends in technology have come together at the same time: big data and cloud computing. This pairing has driven down the cost of big data dramatically so that all companies of any size and industry – including equipment finance – have access to big data more easily. Big data, when combined with cloud computing, like IDScloud, can help equipment finance companies make better business decisions to improve the customer experience, optimize operations, reduce costs and generate bigger profits.

What do you need to ride the wave of digital transformation and big data?

The winners in equipment finance and any industry – especially as we emerge from the pandemic – are the ones who can most effectively leverage big data. Are you ready to leverage big data in a post-pandemic world?

Learn more how IDScloud can help you make well-informed decisions to grow your equipment finance business with our cloud-based solutions.

Are you ready to invest in your digital transformation?

Learn how to make well-informed decisions in a post-pandemic world to help grow your secured finance business.

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