Technological change is accelerating, and with so many advancing technologies on the scene, where should equipment finance companies invest their time, energy and dollars? The panel discussion, “Emerging Technology: Hype vs Reality,” at ELFA 2020 Business LIVE! addressed these questions.

Session presenters Cameron Kruger of Accenture, Jillian Munson of Innovation Finance USA, Erich Dylus of Vedder Price P.C. and moderator Deborah Reuben of TomorrowZone provided insights and real-world examples for the equipment finance industry. During the session, participants were polled on whether they thought the use of these technologies were hype, reality or a combination of both.

The following are four key technologies to consider and some of their many applications for equipment finance companies.

Artificial Intelligence (AI) and Machine Learning – AI refers to intelligent automation, or machines doing tasks more often associated with humans such as vision, language recognition and categorization of very large data sets at high speeds. Industry research indicates that a majority of equipment finance organizations are currently piloting or adopting AI.

Deploying AI is not necessarily an either/or situation of replacing humans. In many cases AI can be used to amplify people’s productivity. Finance companies have been deploying AI for intelligent call deflection and virtual assistants, especially during the early days of the pandemic when companies were flooded with customer calls. It is also used for credit adjudication and forecasting equipment values.

Other practical applications include combining AI with optical character recognition (OCR) functionality to automate the reading and extraction of text from equipment invoices and other documents. AI is also being used in conjunction with image analysis so facial scanning technology learns to understand and recognize facial features during identity verification.

AI enables processing of massive amounts of data with minimal human interaction, which means less employee involvement, shorter wait times and quicker results for customers.    

Distributed Ledger Technology (Blockchain) – Blockchain is a core infrastructure technology that records the provenance of a digital asset, such as cryptocurrency. Blockchain stores data, removes all instances of third-party trust or control from the information, and is a secure, transparent way to show transaction history to all parties. All contract, invoice and transaction data, including digital signatures, in equipment finance transactions can be stored on a blockchain to ensure the data is immutable and accessible. The data can also be encrypted so that even though it is stored in a decentralized way it cannot be understood without the private key to the information.

Internet of Things (IoT) – The IoT is expected to grow to over 75 billion connected devices by 2025. Copiers were early examples of connected devices in the equipment finance industry. They would communicate by modem when they needed service, paper or toner. Large medical equipment was similarly connected for the last 20 years.

With everything connected to the internet, the volume of data is 100 times greater today than three years ago. The data coming from connected vehicles such as tractors or trains is monetizable. With pay-per-use contracts, companies can proactively service or upgrade equipment. There is tremendous potential for business model, product, service and customer experience innovation by combining technologies.

In the future, zero dollar leases are likely if customers are willing to share their data in exchange for using an asset, particularly in the autonomous mobility market.  

Biometric Identification – The global biometrics market is forecast at $44.2 billion by 2021. Biometrics is the technology used to unlock a cell phone or laptop with a thumb scan. Biometric ID is being widely explored as a contactless mobile security measure, especially in the current remote work environment. Biometric identification is easily integrated into business practices due to the proliferation of personal devices.

Two main categories for business use are fraud/risk analysis and information access. Biometric ID technology can be used for Know Your Customer (KYC) processes for ID verification with driver’s license verification and facial scanning, and be combined with AI or machine learning to streamline onboarding and reduce customer wait times. Logical or physical data can be accessed with facial or fingerprint authentication. E-signature security is also enhanced when combined with biometric ID. These examples of biometric ID can be integrated with blockchain and other emerging technologies.

The use of biometrics raises privacy concerns since faces and fingerprints can’t be changed if they are compromised. A few ways to address privacy concerns are to make it difficult to access information without authorizations through two-factor authentication, decentralize the access to the data and wherever possible keep data storage temporary.

What’s Next?
The session presenters at ELFA 2020 Business LIVE! agreed that the key to digital transformation is to evolve and experiment. The important thing to remember is that it is not necessary to become an expert in these technologies. Understanding their implications and staying up to date in what is possible at the intersection of multiple technology trends can help in the development of innovative business models and the customer experience.  

Recordings of all the breakout sessions presented at ELFA 2020 Business LIVE! are available to registered attendees on demand for replay until Jan. 22, 2021. Keynote presentations will be available until Nov. 23, 2020.