The process of onboarding and managing transactions is extensive and labor intensive. Artificial Intelligence provides new efficiencies that can transform the productivity of any size company in the equipment finance industry. 

The equipment leasing and finance industry is constantly seeking innovative solutions to meet evolving business needs. In this era of rapid advancements, artificial intelligence (AI) is making its mark and revolutionizing the industry. From data driven insights to streamlined processes, AI is presenting unparalleled opportunities for growth and success.

In today’s digital landscape, AI is transforming the way data is gathered and analyzed. With advanced algorithms and natural language processing, AI systems can extract valuable insights from a vast array of data sources. This empowers leasing and finance companies to make well-informed decisions, identify emerging risks and opportunities, and provide tailored solutions to their clients. Gone are the days of manual data collection and analysis – AI enables efficient and effective decision-making based on accurate and comprehensive information.

Moreover, AI is driving process automation and optimization within the industry. Repetitive and time-consuming tasks, such as document processing, contract management, and risk assessment, can now be automated with the power of AI. This not only improves operational efficiency but also reduces human error, freeing up valuable resources to focus on high-value activities and providing better customer service. By employing the capabilities of AI, leasing and finance companies can streamline their operations, improve productivity and achieve cost savings.

However, with technological advancements come security concerns that must be addressed. Safeguarding sensitive data and protecting it against potential breaches is vital in the AI-driven landscape. This requires a proactive approach to cybersecurity, including robust encryption protocols, access controls and regular security audits. Additionally, fostering a positive culture of security awareness and education is necessary to empower employees with the knowledge and skills to identify and respond to potential threats effectively.

In this article, we will dive deeper into the three key areas where AI is creating a significant impact in the equipment leasing and finance industry: data gathering, process automation and optimization, and analytics for decision-making.

Data Gathering 

Data gathering is one of the main areas where AI can play a significant role, revolutionizing the way we collect and analyze information. Due to its ability to process vast amounts of data quickly and accurately, AI algorithms can streamline data collection processes, optimizing time and resources. Below are some examples of how AI can be used to collect data:

• Automated Data Extraction: Algorithms can be designed to extract information from hard copy documents such as contracts, bank statements, credit application forms, etc. by employing OCR (Optical Character Recognition) algorithms and natural language processing techniques. AI can extract key information from documents like scan copies, PDFs and photos, and store this information in structured formats for easier analysis. 
• IoT and Sensor Data: AI can leverage information from IoT- enabled equipment and sensors to provide real time asset performance information. By monitoring equipment remotely, AI can collect data on parameters such as temperature, vibration, and energy consumption, allowing lessors to optimize maintenance schedules, detect potential issues before they escalate, and improve overall equipment efficiency.
• Natural Language Processing Tools: Tools such as ChatGPT are designed to understand and generate human-like language. AI-powered tools can gather and analyze customer feedback through various sources, such as online reviews, social media and surveys. This allows businesses to analyze customer satisfaction and identify areas for improvement.
• Automated Web Scraping: Web scraping is the extraction of useful information from online sites. The information is collected and then stored in a database format that can be used for analysis. AI-powered tools can crawl through multiple websites, extract relevant information and organize this into structured formats. This can help businesses for market analysis to gain insights on trends and competitor strategies.

‍Process Optimization 

There are many time-consuming manual processes that can be taken over by AI-powered tools. The entire loan application and approval process is long, drawn-out and requires extensive paperwork and manual data entry. Integrating AI can help expedite these processes.

Chatbots equipped with efficient algorithms can efficiently collect relevant information, assess eligibility, review due diligence checks and provide preliminary approval recommendations. Equipment finance involves extensive paperwork, such as, loan agreements, contracts and documentation. With the help of AI, contract generation can be automated and predefined templates can be used. This helps reduce human error and can accelerate the entire process. 

In addition, these tools can be available 24/7, allowing clients to engage with customer service at any time and receive accurate responses without having to wait for the availability of a human agent. This speeds up the process and improves the overall experience.

AI can offer personalized recommendations for customers allowing them to find the most suitable leasing options based on their specific needs and characteristics. Options can be tailored based on their industry, budget and unique requirements; thus, enhancing the leasing experience.

Predictive Analytics for Decision Making

AI tools can leverage information to improve decision making in the industry. AI can analyze historical data to identify patterns and predict future behavior of borrowers. Predictive analytics can forecast defaults, expected losses and overall portfolio performance, enabling lenders to make data-driven decisions, adjust their risk management strategies and optimize their lending practices reducing potential losses.

The equipment finance industry has seen an increase in fraudulent activities, especially since the pandemic, with the increase of digitalized processes and new fraud technology. Fraud costs the industry millions of dollars every year. Data analytics and AI algorithms can be trained to identify and mitigate fraudulent activities. By applying machine learning techniques lenders can improve their fraud detection capabilities and safeguard their operations.

Another interesting area where AI can be used is in generating market insights. Staying up to date with market dynamics, equipment values and industry trends is crucial for operations. Through these technologies we can monitor and analyze data from various sources providing lenders with actionable market insights.

Conclusion

In the challenging and competitive landscape of the equipment leasing and finance Industry, embracing artificial intelligence (AI) is not just an option but a strategic imperative. By harnessing the power of AI, businesses in this industry can gain a significant competitive edge, drive operational efficiencies, and unlock new avenues for growth and profitability.

AI offers transformative capabilities in data gathering, process automation, and analytics, revolutionizing how leasing companies collect, analyze, and utilize information. The ability to extract valuable insights from vast data sources enables well-informed decision-making, risk identification, and tailored solutions for clients. Moreover, automating time-consuming tasks through AI streamlines operations, reduces errors, and frees up resources for more strategic initiatives.

While embracing AI, it is crucial to prioritize data security and privacy to safeguard sensitive information. Implementing robust security measures, including protocols, access controls, and regular audits, can help in developing confidence in clients and stakeholders. A strong security culture, coupled with ongoing employee training, ensures the industry stays vigilant and well-prepared against evolving cybersecurity threats.

The equipment leasing and finance industry can unlock the full potential of AI, create new business opportunities, and pave the way for sustained success in the digital age. 

The last paragraphs of this article were written with the help of AI (ChatGPT). Did you notice? Thanks ChatGPT!

‍ABOUT THE AUTHORS: Carolina Patino, Senior Finance and Risk Consultant; Juan Esteban Zuleta, CEO, and Patricio Pazmino, Head of Finance and Risk Analytics are with Kin Analytics.

Find this article in: Newsline Magazine by the National Equipment Finance Association (NEFA), July - August 2023