2020 mid-year review in Lending & Leasing

Finance matters to our society as much as energy to life; because of this, fueling financial transformation is vital for development and leadership. As a global provider of credit and asset management technology, we are able to produce the most unique and configurable solutions for our customers by analyzing data and developing open solutions.

As we head into the last half of 2020, we reflect on all that has unfolded so far this year. Jamil Jiva, EVP and Head of Lending & Lending North America at Linedata, shares his thoughts on the industry and the trends he expects to be at the forefront for the remainder of the year.

How do you see the financing industry evolving over the next six months, and beyond?

JJ: I would narrow it down to three key trends – digitization, risk management and an emphasis on consolidation, in regard to acquisitions and mergers. Financial institutions are still investing in mission-critical priorities such as digitization, risk management, regulatory compliance and the customer experience and now, more than ever, they know where their gaps are. All of this requires more capital, and, at the same time, companies are challenged to meet these goals due to reduced spend. 

• Digitization: Financial institutions have been talking about digital transformation for years. COVID-19 has given our clients a reason – or “the push” – to invest faster in financial technology services, and we as suppliers are ready to meet those demands. My team and I are hyper-focused on digitization, as it’s key to the industry’s evolution and survival during times of uncertainty.

• Risk management: Economic downturn and fraud are found together. More financial institutions than ever are considered at risk by not assessing and managing risk properly. Post-COVID-19, I believe that lenders will need to enhance or possibly redefine their risk management strategies and optimize business practices or policies they found to be lacking or inadequate brought about by this pandemic.

• Consolidation: During the COVID-19 pandemic, the financial services industry is developing a new way of conducting business. Consumers will have new criteria by which they evaluate who they want to do business with. Financial institutions that hesitate to invest in newer technologies will act as accelerators in the phenomenon of M&A throughout the industry if they can no longer remain competitive. While our clients tend to be on the acquiring side, they still need technology to play a major role.

Successful mergers or acquisitions require careful execution and planning. Large consideration has to be given to what the future state of the organization will look like and what systems and processes will move forward. By leveraging Linedata’s open solutions, our customers are able to accelerate integration and realize value faster.

How has the COVID-19 pandemic changed Linedata and the industry?

JJ: We know our colleagues’ children and dogs a bit better!

Considering the impact of the COVID-19 pandemic and resulting volatility within the market, many elements of the business have changed. Challenges like this drive innovation. During this unprecedented time, Linedata has been able to offer innovative perspectives, driven by conversations with clients and what we’re seeing across the industry in our day-to-day work.

The first, being the new precedent for being able to work in a secure environment from home and the necessary switch to a digital-first way of operating. Digitization has been a core pillar of our work, therefore we’re able to support the many businesses looking to make the switch, as they grapple with the new normal of a workforce that requires remote accessibility.

Additionally, we’re seeing leaders who want to ensure they are ready for the next ‘pandemic’ – whatever it may be – by implementing new protocols to hinder the chance of interrupted service. We’re seeing this be done by way of using software to scale and investing in no-contact digital loan transactions. If digitization was considered to be in an infancy phase before COVID-19, it has certainly matured and is officially here to stay.

We’ve also seen from a sector standpoint, equipment finance – Linedata’s longest standing business line – is showing great resilience as it has in prior times of financial unrest. At a time when companies are looking to grow, while needing to reduce their expenditures, equipment finance helps make investing in the future possible and comfortable.

What makes equipment finance unique to Linedata’s offerings?

JJ: Equipment finance is one of our longest standing business lines, having been a focus for more than 20 years. As we look back at the start of it all, it is amazing to see how a niche industry has become a key pillar of our economy. Equipment finance is not only used by large corporations to finance a fleet of planes, trucks or heavy equipment; it can also enable a household to finance anything from solar panels to mobility solutions. It is an incredible tool to unlock growth, social mobility and even increase access to healthcare. This is why the Linedata team is so passionate about innovating in the equipment finance sector and bringing more flexible solutions to our clients for their customers.

As we shift our focus to current day and the expectations of offering a digital-first solution, we know the equipment finance industry has been cautious in the adoption of newer technologies, but it’s not a task that cannot be accomplished. At Linedata, we help equipment lenders and lessors digitize equipment finance with our end-to-end solution, Linedata Ekip360. The solution provides financial institutions with everything we’ve been talking about – digitization both internally and externally, risk management, consistency and scale. Importantly, we built in flexibility so our clients can easily adjust the solution to match changing business practices, which is necessary for this market.

What do you foresee developing in the next six months?

JJ: The extraordinary challenge of COVID-19 has pushed us into rethinking how we can work closely with our customers without being together. As we are learning what works, I am particularly excited in how we can create more opportunities of international growth from our existing geographical footprint and how we can leverage the talents of individuals out there in the world who are passionate about innovation.