Digital transformation has become a crucial part of modern organisational life; an essential tool for coping with the constant changes in technology that force industries to respond and adapt.

The Covid pandemic starkly highlighted the importance of responding to new circumstances through better use of digital tools. Not only did many organisations have to adjust their internal systems to adopt remote working with little or no notice, many in the finance and leasing sector had to build in greater digital flexibility and new functionality to customer-facing systems, often with only a few weeks to get these new systems launched.

While some organisations have placed innovation at the forefront of their digital transformation, others have prioritised user experience, cost-cutting, or a blend of all three. No matter the approach, one of the biggest challenges facing companies during the pandemic has been the need to transform at a pace which protects the most vulnerable customers without hindering the ability to implement ongoing strategic changes.

For Chris Tobey, Global Sales Director, Wholesale Finance Solutions at NETSOL Technologies, this has been an unprecedented period for the industry. “We’ve never witnessed a year of change like this,” he says. “The experience has seen the NETSOL team leading a wide range of new transformation projects for clients. The pandemic has played a huge role in highlighting the need for a new approach. Our clients and their end-users, sometimes for the first time, clearly see and accept the need for change. The focus now is on how we make sure these transformations are adding value to our clients and their end-users and how we keep them moving forward on this journey.”

Customer pressure

While the internal front-end environment is where the most significant transformations and changes are happening, NETSOL, a provider of frontend and backend systems for asset finance and leasing industries, understands that they are at all times driven by customer needs.

“The major driver of change is the customer,” says Tobey. “The expectations of digital engagement have now become a motivation for them. Customers require complete online application, seamless channel experience, online self-services, personal contact and advice, attractive pricing, and personalised products and services.”

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Released in November 2020, Autotrader’s ninth annual market report found consumers more comfortable with online-only car buying than ever. It found that 41% of consumers would consider buying a car completely online, while 61% think buying online is appealing when presented with a tangible example of how it could work. Banks and other financial institutions have reported similar boom in demand for digital-first or digital-only transactions.

Furthermore, regardless of what the long-term outcome of social distancing and other lockdown restrictions for many customer-facing services, the importance of digital services to end-users is predicted to continue to increase.

Business benefits

While this pressure to provide digital services from customers brings with it challenges, it also brings considerable benefits. In fact, according to The Digital-Led Recovery from Covid-19 published in 2020 by McKinsey & Company, implementing a fundamental change of mindset to focus on the customer, along with operational and IT improvements, can generate a 20% to 30% uplift in customer satisfaction.

For digital transformation to be a success, there must also be positive, calculable gains for organisations. While improving customer satisfaction can be a key benefit in itself, there are several other beneficial outcomes that can also result.

For example, while increased investment in new digital services often reduces profitability in the short term, the picture improves as the benefits of a more digital model lowers operating costs.

As Tobey says: “Value can also be found in updating operational processes, with digitisation allowing better tracking, improved workforce mobility and enablement. A more efficient model helps to measure business performance, and offers the ability to make faster, better-informed decisions. Additionally, digital changes also provide the opportunity for new business models as well as the possibility of alternate service and revenue channels.”

One such channel is the use of chatbots. While they lack the human touch, increasing numbers of consumers actually prefer digital self-service tools, such as an app or chatbot for customer support. A trend that the Covid pandemic is likely to have accelerated.

“Bots can deliver personalised offers, products, and services to customers based on their profile data or important life events,” says Tobey. “Highly-targeted offers delivered at the right time via the customer’s preferred self-service app can dramatically increase conversion rates.”

Furthermore, in The Digital-Led Recovery from Covid-19, McKinsey & Company found there had been a profound shift in CEO mindset on the benefits of digital transformation in recent years. While in 2017, 48% of respondents cited cost savings as the primary driver of change, this had fallen to just 10% in 2020. Of far more relevance were factors such as investing in technology to make it a competitive advantage (38%) and modernising technology capabilities to keep up with competitors (30%).

Focus on finance

For multi-finance companies, the need to transform is pressing. With successful digitalisation tactics such as self-service platforms, firms can develop a better understanding of customer behaviour. This gives them the ability to respond to changes in their buying journey. Top line growth also becomes possible, as the reach in the target segment increases and, thanks to

In fact, according to PwC, as much as $25m per year can be saved by financial institutions if they shift between 5% to 20% of their call volume from agents to online self-service platforms.

MotoLease case study

MotoLease for example, was facing a number of challenges around customer demand, increasing service costs, and old, inefficient methods of payment collection. The motorcycle and powersports financing firm turned to NETSOL for help in streamlining processes and bringing self-service systems up to modern expectations.

NETSOL implemented the mAccount application, a self-service mobile and web-based solution that enables the customer to setup a secure account and access their credit contracts around the clock. This allows users to keep track of contract status, resolve queries, receive relevant contract notifications, and easily make payments.

The application further empowered sales and marketing teams to push in-app promotions to customers, providing the finance company with additional up-selling and cross-selling opportunities. Within one year, 65% of MotoLease’s customers had registered on mAccount, and the company experienced 96% cost savings.

“Digital transformation provides the opportunity to embrace innovation in a way that drives completely new value streams,” says Tobey. “Surveys regularly show that less than half of companies have started any digital transformation, but the majority of those who have see an increase in their profitability. The old way of doing business by fax, email and phone are no longer adequate in today’s fast-moving world.”

Digital transformation lies at the heart of most successful modern organisations. Those best able to adapt and respond to challenging circumstances and changing market conditions are best able to meet or exceed changing consumer demands. Successful firms in automotive leasing and other asset finance, are those able to anticipate consumer requirements and deliver the most convenient services. Increasingly that means using technology and the best way to keep up to date with all the latest developments is to engage a specialist digital transformation vendor, such as NETSOL. This is the way to ensure any new services and technologies deployed are truly transformational.