The lock-step growth of digitalisation, risk and regulation within asset finance: Where do you stand with the Digital Operational Resilience Act (‘DORA’)?
Innovation – for example, to improve efficiency and / or customer experience – is driving…
Oh no, not another self-serving article hyping up “as a service” and servitization!
In our work as advisors, we hear plenty of healthy scepticism about managed services, ‘as a service’ models and servitization. There are lots of names for it. Is it real or these over-used expressions with little substance or practical business application and customer resonance?
It is clearly the case that many industries are still heavily focused on moving equipment and use asset finance primarily as a sales aid. We do however increasingly see OEMs, dealers, VARs and distributors across a broad range of industries, deploying richer financing offerings and sophisticated integrated solutions.
Unfamiliar risks in these models
The move into these types of solutions naturally brings new challenges and potentially new types of risks that need to be effectively managed. Beyond the traditional elements of credit risk and asset risk which the asset finance industry has managed effectively over the years, there are several additional risks to address.
Depending on the market maturity and customer demands, the newer solutions require additional focus on:
Go to market & product development
In addition to the risk management, there are also the realities of commercial engagement, around market & product positioning and testing, not to mention the sales skills and incentive alignments required to make such offerings fly.
Solution architecting is another key competence that businesses need to address. This can particularly be true for the set of customers who are seeking true off-balance sheet solutions, and where providers are finding ways to address such customer needs.
Our analysis: real opportunities do exist
If reading all of this is confirming the view that it’s maybe better to wait for others to chase after this topic and learn their lessons, we would maybe just offer pause for thought.
It’s our view at the Invigors/Alta Group, that those companies that act soon and act smartly could give themselves a significant first mover advantage. The main reason we hold this view relates to data:
Whilst certain areas of the asset finance industry, such as those in technology finance are past the tipping point, we see other market areas fast approaching that point.
This is one of a series of articles from Invigors and the Alta Group on the topic of servitization.