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…
Leasing Life Annual Conference Barcelona – November 28th, 2019
One of the best-received presentations at last week’s Leasing Life annual conference in Barcelona was Patrick Gouin’s session on the likely impact of digitalisation. His theme was how organisations can ensure they profit from the opportunities and avoid the potential pitfalls.
Patrick outlined the context: a staggering 1.3 Trillion USD is spent on digital transformation worldwide in 2018. An equally astonishing 70% of projects are not anticipated to deliver the projected benefits. This begs the question why spend such vast sums of money with such low probability of success. The answer appears to be CEO fear: only 8% expect their business models to survive intact the transformation to digital.
Patrick highlighted the growth in FinTech spending and that Finance and Insurance are the industries most impacted by digitisation changes.
Whilst to some all this change might appear uncomfortable and worrying, there was also plenty of good news and cheer in the presentation too. This ranged from:
Patrick focused in particular on this last point. He emphasised the impact this will have in terms of new risks and the delivery of these service offerings. Rather than seeing this as a threat, this is a real opportunity for our industry to grow and differentiate itself from cash and loan products. One particular comment that struck home was that
“FINANCING BECOMES ONE OF MANY VALUES RATHER THAN THE CORE VALUE”.
The session moved into the practicalities of transformation. Why so often the investments in digital transformation fail to deliver the promised outcomes. The culprits identified included:
Patrick also addressed the need to have a broad and deep vision both from a business and increasingly from a technical IT perspective. Focusing on easily visible and understandable items such as apps and portals, and failing to address underlying issues such as security, data robustness and underlying delivery systems and technologies is a recipe for failure.
Patrick indicated some additional considerations specific to the asset finance world, including
Lastly he addressed the question of buy, build or partner, an important consideration when embarking on such a transition. As so often, Patrick was also somewhat provocative, challenging the audience to tell him whether they have an R&D department and asking if not, why not?
In conclusion, Patrick circled back to what this means to us and the new generation of staff in the workforce and what types of skills, competences and roles will need to be present in the successful organizations of the future. Unsurprisingly there was a strong bias towards technical competence, but also a suggestion that some of the softer skills will also be a key area for success, indicating the potential need for positions such as digital anthropologists, community and sustainability managers.
In short, the session was somewhat uncomfortable for those with a conservative mindset, and perhaps in that sense a wake-up call for many. For others though it was a clarion call to embrace the new opportunities that are presenting themselves. The overall message was crystal clear – standing still is not an option for long term survival.