Wolters Kluwer, a global leader in professional information, software solutions and services, announced the latest analysis from its Equipment Lease Finance Digital Transformation Index. The index tracks the rate at which equipment lessors and service providers are progressing in the evolution of paper-based finance back-office processes to digital. Results from the key resource demonstrate continued growth in adoption rates and a sustained push toward digital transformation within the industry.
The rate of digital contracting adoption bounced back in the fourth quarter of 2024, increasing by 6% following a 23% decline in the third quarter. Additionally, a positive year-over-year growth trend of 31% was recorded compared to the same quarter last year, while the moving four-year trend increased by 26% dating back to Q4 of 2020.
The rising adoption rates seem to reflect a gain of momentum in overall business investment, underscored by ELFA’s 2024 Survey of Equipment Finance Activity. Not only did that survey measure an 8% rise in new business volume in the large ticket segment and 7.2% in the small ticket segment, but the association’s confidence Index for the equipment finance market reached 67.5 in November, the highest level since August 2021.
Although the digital ELF loan volume decreased 10% in securitization markets for the fourth quarter, the year-over-year adoption rate was up 25% when compared to Q4 of last year. Even more, the rate climbed 23% in the last four years, demonstrating a continued positive adoption trend. Over the past 12 months, the equipment finance industry’s securitized markets and asset-backed securities (ABS) exhibited mixed results, though leaned toward growth. The overall industry expanded to approximately $1.34 trillion in 2023, with 82% of end-users using some form of financing for their equipment and software acquisitions.
“The recent uptick in confidence for equipment leasing and business investments is driving a sustained push toward digital transformation in back-office operations," said Eric Capehart, Associate Director of Market Strategy for Wolters Kluwer’s Digital Lending Solutions. "This trend reflects the industry’s recognition that modernizing contracting, documentation, and workflow processes is imperative for enhancing efficiency and competitiveness in today’s market. As businesses rebound and equipment leasing surges forward, eSignatures and digital documentation are becoming the new standard, enabling faster transactions and improved access to capital.”