Even the most challenging economic times come with opportunities to grow. But as gaps open for asset finance providers in the current market, it’s more important than ever to understand the risks that growth could bring, too.
Right now, there are chances to be seized. With unsecured lenders increasingly losing their credit risk appetite, asset finance firms with more flexible risk policies can step into the breach to secure new business.
However, it’s still critical to exercise caution. In any type of lending there can be a big difference between quantity and quality, volume growth and profitability. So, in today’s highly unpredictable market, you need a crystal-clear view of potential customers and their creditworthiness.
Sometimes, though, that’s easier said than done. There’s a lot of data to gather. And if you’re running outdated, fragmented systems or processing a lot of applications for finance manually, it’s all the harder to piece together data and make a fully educated credit decision.
And in today’s environment, educated decisions are your best defense against growing uncertainty and rising risks.
Digital asset finance technology can now give your firm all the tools it needs to not only automate customer-facing processes and speed up credit applications, but also get a fuller picture of your customers and the risks they might present.
With artificial intelligence and machine learning technologies powering your systems, you can now analyze a far wider range of data – from traditional financials to sentiment-based analysis of a borrower – much faster than ever before.
But technology can come with its own vendor-related risks. And in the wake of the recent failure of Silicon Valley Bank (SVB), which lent primarily to small technology companies, there’s been growing anxiety about the stability and reliability of fintech providers.
That makes it all the more important to invest in asset finance technology from larger, more established firms with years of industry experience and partnerships behind them and a wide range of complementary, easily scalable financial systems and services.
In a recent report, IDC says it “believes that spending on technology will not be impacted overall” by the fallout of SVB’s closure. “Rather, banks will shift their investment priorities to defend/grow revenues in traditional products and services, and possibly shift away from smaller fintechs to larger incumbent partners.” 1
Ultimately, there are winners as well as losers in every economic crisis. With a careful, data-driven, risk-aware approach – and the right technology and vendor on your side – growth opportunities and competitive advantage could be yours for the taking.