Asset finance had a good year, in 2023 new business was reported to be up 12% on 2022 (source: FLA). However, in the ever-evolving landscape of asset finance, the need for rapid decision-making has never been more pressing. As inflation continues to exert more pressure on firms and high rates persist, borrowers are compelled to hold onto assets longer, presenting both challenges and opportunities for industry players. Amidst this backdrop, technology continues to streamline simple transactions, yet the role of human expertise remains paramount in navigating complex underwriting cases. A complex macro picture can create more competition for experienced talent, which again adds to the complexity of running an asset finance business in 2024.

In the face of a cost-of-living crisis and high interest rates, borrowers are compelled to reassess their asset purchasing and replenishment strategies, sometimes opting to retain assets for longer durations. This shifting landscape underscores the critical importance of swift decision-making in asset finance. Companies must adapt swiftly to evolving market conditions, seizing opportunities and mitigating risks with agility and precision. Swift decision making is a marketing tool, a customer retention tool, and a point of differentiation which may afford better pricing opportunities for the lender.

While technology has revolutionised simple and one-off transactions, the human element remains indispensable in tackling complex underwriting cases. An experienced underwriter, who has seen most situations, can often be the difference between the right and wrong lending decision. Where funds are released, it can also be start of a lifelong, profitable, relationship.  In short, technology augments human capabilities, enhancing efficiency and accuracy, but it cannot replace the nuanced judgment and expertise that seasoned professionals bring to the table. Technology can’t leave the office to go and “kick the tyres” on a project. In navigating intricate scenarios and assessing risk, the human touch is irreplaceable, underscoring the enduring relevance of human expertise in asset finance.

In an industry where reputation is paramount, firms with stellar track records inevitably become targets for talent poaching. The loss of key personnel can disrupt operations and erode trust among clients. Therefore, talent retention and development are critical priorities for asset finance firms. Investing in employee satisfaction, career development, and a supportive work culture can strengthen employee loyalty and mitigate the risk of talent flight. In essence, build a working environment your top talent chooses to stay, not leave. Elevate your Employee Value Proposition (EVP) to attract and retain the best. In Jim Collins’ outstanding work “Good to Great” he discusses how compensation models do nothing to motivate high performers, but they are very important in attracting the best. Are you competitive enough to get the people you need through the door?

As the asset finance landscape evolves amidst economic turbulence and technological advancements, the principles of speed, talent, and resilience remain constant. Companies must embrace innovation, leverage technology, and invest in talent to navigate challenges and capitalise on opportunities. By fostering a culture of agility, expertise, and employee engagement, asset finance firms can build a foundation for sustained success in a rapidly changing environment.

Fram’s asset finance and specialist lending practice works across the UK. If we can assist you, then please contact Kelly Biggar at [email protected] or call 01525 864 372.