How the leasing industry is perceived by its customers, both end-users and partners, and how it can adapt to their changing demands was central the discussions at the seventh annual Leasing Life Conference Berlin’s Grand Hyatt on 5 December.
Lombard’s Ian Isaac opened the debate, taking part in an open discussion with two of the UK finance company’s end-users. Isaac was joined by Colin Spencer Halsey, chairman of manufacturer Hymid Multi Shot, and Christopher Simpson, chairman of the Maufacturers Excellence Awards, the debate centred around how the leasing industry is viewed and what could be done to further help manufacturer customers.
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De Lage Landen’s country manager for Germany, Thomas Stahl, explored the same themes with his guest speaker Günther Binder, finance director at yellow plant maker Wacker Neuson, sharing their thoughts on the origins and future of the vendor partnership established ten years before.
While it was clear in both discussions the customer was benefitting from the relationships with the finance companies, the most important aspect for customers, end-user or vendor partner, was for the finance companies to be able to adapt and innovate along with clients.
Capturing lightning
Richard O’Donohue, director of business development at Dell Financial Services, too spoke of innovation and adaptability within the captive market – especially in the technology financing market. Both he and fellow captive leader Rafael Chacon of Cisco Capital made it clear how the fast paced technology markets and relatively short life span on leasing deals had lead to innovation in the finance products provided by their firms and the time it took to get these to market.
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By GlobalDataDoing so had allowed both firms to have good penetration rates for the industry, another common point of reference at the conference. Neither had achieved or come close to the penetration rate of Wacker Neuson, whose 75% penetration rates on their larger equipment impressed the conference delegates and raised the question of how high the wider leasing industry should aim when it comes to market penetration.
The innovation and customer focus theme was returned to in the presentations of Pascal Martinez of Linedata and Diwakar Singhal of Genpact; both spoke about the benefits to firms and customers of increased efficiencies through enhancing processes and harnessing technology.
The speakers the potential gains for the industry from new ways of thinking about everyday tasks, whether by outsourcing certain processes or developing more comprehensive operations systems.
Both proposals met with a mixed response but delegates did see the benefits of such ideas if they could be made to work in the asset finance industry.
Financing the financiers
The need for more capital, either through the savings proposed or through other sources was explored by many speakers as the market looked to generate growth.
Institutional money was seen as a possible source of capital by Lars Bang, commercial director of Nordea Finance. He saw obstacles to the use of private equity and pension fund money to fund future investments, particularly in the perception among investors the return on investment from leasing might be too low. However, he saw glimmers of hope if the level of leasing usage could be grown and the awareness of the industry among business enhanced.
Ian Dennis, director at LPM Outsourcing, saw investment banking services as another possible route to increased capital and outlined the advantages of the securitisation markets. Through this resurgent capital markets product he saw a cheap and effective means for both bank and non-bank owned business’s to compete.
And, for the banks, the competition was seen as a key sign of the returning health of the market, according to Eric Frachon of Société Générale Equipment Finance (SGEF) as he highlighted the difficulties bank-owned finance companies had when it came to getting funding internally. Frachon asked whether asset finance was a business line or just a product and said this lack of clarity was something SGEF had managed to overcome within its parent group but acknowledged how regulation and perception of the market were possible restrictions on future growth.
End-user perception of the asset finance market was also touched upon in the last discussion of the day. Andrew Denton of CHP Consulting was joined by Peter Thomas, the chief operating officer of the Leasing Foundation, and Chris Sullivan, chief executive of the corporate banking division of Royal Bank of Scotland.
Education and the future
This final part of the day introduced the Leasing Foundation’s ‘Leasing 360’, an online platform which hopes to comprehensively review how the asset finance market has arrived at its current position and where it is likely to be in the future. Thomas also looked at how on education and training would figure as part of that future.
Education should not just be limited to how the core skills of the industry were passed on, according to Sullivan, but also how to move the business away from the white middle-aged male personnel profile which was endemic at present.
He said diversity through education was key and spoke of his efforts within RBS to change the culture to one where opportunity was open to all.
As the conference ended and delegates looked forward the evening’s awards dinner, there was a sense the right people had been put back in the centre of the discussion: the customer.
