AI could mean business – but is your asset finance firm ready?

Since the launch of ChatGPT in late 2022, generative AI has captured imaginations and fired debates across the world of business, asset finance firms included. Yes, there’s been a lot of hype and a lot of noise. But GenAI’s ability to process very large and diverse data sets and generate content in accessible and easily usable formats (including conversational) has potential to increase efficiency and improve the customer experience. The question is whether companies can access the skills needed to support it.

Putting gen AI to good use
In asset finance, a number of use cases for generative AI are already emerging, each with a strong business case to back it up. For example, in the not-too-distant future, gen AI tools could potentially help with:

1. Personalized car searches
With gen AI powering a website’s search facility, auto finance customers could potentially choose a vehicle and finance option that meets their individual needs. Rather than checking a limited range of boxes (electric vehicle, four doors …), they could give a chatbot any number of extra details (we have a dog, we like hiking …) in a freer-flowing dialogue.

2. Dynamic pricing
Many different risk factors should go into your prices and help you set monthly payments, interest rates, terms, residual value and so on. But a lot of those factors are changing all the time. Supply chain issues, for example, could affect the availability of certain vehicles; a competitor may have changed its pricing strategy; there could be seasonal variations, too. Gen AI’s power to constantly absorb large volumes of data from multiple sources means you can incorporate many more risks into your models and make price adjustments accordingly in real time.

3. Fraud detection
As probably the top use case for gen AI at the moment, fraud detection is another, prime example of the technology’s superhuman ability to monitor and analyze data. In this case, gen AI could allow asset finance firms to scan for more anomalies and respond to new emerging threats quicker than ever before to generate notifications or alerts.   

4. Fleet uptime
For commercial vehicle finance firms, keeping fleets of vans or trucks on the road is critical for maintaining business revenue. To optimize uptime, gen AI analytics could be used to predict any maintenance requirements and spot potential problems before they cause a breakdown.

5. Collection strategies
In these times of economic uncertainty, the asset finance industry is likely to focus its efforts less on driving new business and more on servicing its existing customers and collecting their payments. This is yet another opportunity for gen AI to alert you to issues, this time with customers’ ability to pay.

6. Analysis and reporting
Why just look at a dashboard when you can ask a chatbot to drill into your data and build reports on your behalf? Gen AI tools that can do this already exist and are getting more powerful all the time.

Understanding the business impact
So, where do all the possibilities of gen AI leave human intelligence? With the technology now advancing so quickly, it’s important for businesses to understand the implications for their workforce.

According to McKinsey, gen AI could end up automating 10% of all tasks in the U.S.[1] In response to this likely trend, asset finance firms should carefully consider the strategic focus of their organization and where gen AI tools could fit in.

If, for example, you’re aiming for expansion and growth, then gen AI-powered search facilities and dynamic pricing tools should be your priority. But if you’re looking to cut costs, you’ll want to exploit gen AI’s abilities to automate and accelerate manual processes.

Preparing your people
Whatever your gen AI strategy, you need to make sure your organization has the skills to back up your investment in technology.

In a highly competitive market, talent is in remarkably short supply. IDC reports that an estimated 90% of firms will be affected by IT skills shortages by 2025, costing approximately $6.5 trillion globally.[2]

Specifically, you should be looking to attract talent in the following areas:

• Technology – building data models, managing their releases and automating workflows                                          
• Ethics and compliance – training models with unbiased data and addressing the legal and IP considerations of producing content with gen AI                                                                        
• Security – keeping data safe, especially in the light of Microsoft’s recent 38TB leak[3]                                                                                  
• Knowledge sharing – helping retrain staff as AI engineers, as automation replaces traditional roles

Keeping up with change – and competitors

Without securing the right depth and breadth of IT talent, asset finance firms, like any other organization, will struggle to reap the business benefits of gen AI or stay ahead of their competitors in the future.

The time to prepare is now. In the rush to take advantage of new technologies, you can’t afford to get left behind.

[1] McKinsey, Generative AI: How will it affect future jobs and workflows?, September 21, 2023

[2] IDC, Skills Forward: A 2023 IT Skills Shortage Survival Guide, March 2023

[3] Tech Republic, White Hat Hackers Discover Microsoft Leak …, September 19. 2023