The final recommendation in our Top 5 futureproof technologies for secured finance series is to harness data insights to guard your future. Leveraging data insights is one of the top growing finance trends. That’s because we’re more connected now than at any other time in history. And this is only expected to grow exponentially as connectivity and performance data matures and becomes more widely available.
This section highlights another growing finance trend – data insights – in the secured finance industry: automotive finance, equipment finance, wholesale finance, and working capital finance.
The value of harnessing data for automotive finance
Experts predict that by 2030, 95% of all new vehicles sold globally will be connected. And access to in-vehicle data sets the stage for additional revenue opportunities such as remote diagnostics, online service scheduling, and over-the-air (OTA purchasing), where software improvements are made via the internet.
To help prepare automotive finance lenders for that future and leverage meaningful vehicle connectivity insights, Solifi recently became a member of the BlackBerry IVY Advisory Council. The purpose is to accelerate the creation of high-impact technology use cases and solutions. This data-driven intelligence will enhance existing value-added services, optimize business operations, and enable innovative products.
Access to real-time data with connected vehicles will also accelerate the shift to predicted financing models, such as moving away from traditional ownership to pay-for-use or shared ownership financing models. We’re excited to share how this growing finance trend will impact automotive finance lenders. Stay tuned.
The value of harnessing data for equipment finance
If you go back to the early days of the pandemic, one major concern was dealing with risk in all secured finance industries and all geographies that could impact businesses and our lenders’ and lessors’ ability to collect money or if their customers were unable to pay due to lockdowns.
In a very short time, we were able to harness data insights to help our equipment finance customers especially understand their business risk and provide a little peace of mind in midst of chaos and constant change. We leveraged data multiple sources – customer asset data, public pandemic data, public industry data – to create an application that provided visibility to their portfolio risks to help them identify and manage risks in the early weeks of the pandemic.
Because of technology, we went from an idea to launch in just five weeks. Another good example of how technology and data insights can help equipment finance lenders quickly adjust to change as a result of business disruption.
The value of harnessing data for wholesale finance
Managing risk hidden in inventory collateral can hold your wholesale finance business back and limit your growth. With Solifi’s wholesale finance system, you can view your entire business from the portfolio level to the individual dealer – and ultimately into each asset.
Harnessing data insights in the wholesale finance industry is critical especially in light of the current finance industry trends – market volatility and low inventory levels.
Low inventories threaten dealer viability, fluctuating asset values create collateral risk exposure, and an influx of used product can create additional volatility. Until the global supply chain crisis recovers, Solifi’s wholesale finance solution and data insights can help you manage your challenges through this disruption. You, as a lender, need a system that can monitor dealer health as well as supplier or manufacturer risk, and an efficient and flexible system to maintain margins.
That’s where data insights can help. We provide you, the wholesale finance lender, with the proper controls and proactive data insights such as running periodic scoring models to proactively monitor dealer performance based on real-time data to identify risk and manage exposure based on your own rules.
For example, it’s not uncommon to conduct physical floorplan audits based on an arbitrary schedule – monthly or every six weeks at every single dealer. Harnessing data insights can allow you to schedule those audits based on risks. Our system can evaluate a dealer’s financial condition and program performance in real-time and then schedule audits based on risk. This helps you focus your wholesale finance resources on those audits that are truly needed. And you’re saving costs by not auditing your high-performing dealers.
The value of harnessing data for working capital finance
The common thread to overcome the top challenges working capital finance lenders face is access to real-time data and data insights. Mitigating risk is one of those top challenges. Technology such as application programming interfaces (APIs), data streaming, reporting, and SaaS can help you optimize business operations, uncover hidden insights to make better business decisions, and identify, predict, and mitigate risk.
The best way for working capital finance lenders to mitigate risk, for example, is to receive data from multiple sources regularly. For the best data insights, you want visibility of the bank (lender), client, and external data. For example, a lender reviewing information from various sources may include incoming deposits via a treasury management platform, or comparing incoming cash against the cash applications in the client’s accounting system to ensure the correct invoices were paid, or looking at historical payment trends.
How do you harness these meaningful data insights quickly from multiple sources? That’s where technology like APIs, data streaming, and reporting come in. You can connect disparate systems and turn these multiple sources of information into business insights to help grow and guard your working capital finance business.
See our related blog post series for some real-world examples of API and reporting technology work together to harness data insights and create value: How to mitigate risk with APIs and reporting.
Want to learn more?
Contact one of our experienced secured finance solutions consultants to learn how you can futureproof your business with software-as-a-service (SaaS) technology and an open finance platform.
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So many opportunities exist to accelerate your secured finance business with technology. Regardless of your size or where you are on your digital transformation journey, keep these top five recommendations in mind when futureproofing your business with technology.
Top 5 ways to futureproof your business with technology
Cloud: Essentially storage of data, software, and services on virtual servers located in data centers all over the world.
SaaS: Instead of users installing software on their computer, software-as-a-service (SaaS) applications are hosted on cloud servers and are accessed either through a browser or through an app.
Evergreen IT: Small iterative updates to IT systems and software so that business systems are always kept up to date.
Platform: The foundation of your business ecosystem. A set of software tools and a standard infrastructure that serves as a foundational service that can be leveraged to integrate other applications and services.