PHOENIX — Equipment finance companies foresee development of artificial intelligence tools specific to their industry within 10 years as AI is seeing adoption and adaption by industry organizations seeking to gain a competitive advantage.
The industry expects eventually to have an AI model designed specifically for equipment leasing and financing, Martin Klotzman, director of marketing and operations at Walnut Creek, Calif.-based Ivory Consulting, said during a panel at the Equipment Leasing and Financing Association’s annual convention on Monday.
“We’ll have a ChatGPT-like tool where you can ask industry-specific questions to that model and get actual real responses,” he said. “That’s going to play into the tasks and operations that we’re responsible for.”
AI use cases
AI’s ability to process information and detect issues helps lenders gather data to improve operations and facilitate more loans while maintaining risk, Nate Gibbons, chief experience officer at loan and lease servicing platform QuickFi, said during the panel.
“Because of data points and sources that even a well-trained human wouldn’t know to look into, the technology has given us the ability to underwrite to approve more loans without the offset being taking more risks,” he said.
Equipment lenders will be able to utilize industry-specific AI to improve operations such as credit assessments, while equipment manufacturers can use AI and automation to improve their equipment, Ivory Consulting’s Klotzman said.
“Credit assessments are going to be almost instantaneous with near-perfect accuracy,” he said. “The equipment that we finance are going to have substantially longer lifespans. AI is going to be embedded into that equipment, which can predict future maintenance issues and prevent it.”
The data gathered through AI may also play a key role in equipment pricing, Klotzman said.
“Data can flow into your pricing models, and we’re going to have dynamic pricing, where the pricing schedule could change on a daily basis based off of the usage of the equipment for that specific day or week,” he said. Lenders can “adjust the residual as well, based off of how that usage looks over time.”
As equipment finance customers continue to evolve in their use of AI and other technologies, equipment financiers need to evolve as well, QuickFi’s Gibbons said.
“As our customers are evolving and the technology that they’re using to run and grow their business is evolving, it’s incumbent on us to consider how we can evolve as an industry to be able to provide services for our customers.”
