Equipment lenders adopting workflow AI, automation solutions

Equipment lenders are shifting toward workflow AI and automation as customers demand more comprehensive digital solutions. 

Most small-business owners — 79% — prefer their banks to provide digital solutions for banking, payment and other administrative tasks, while 80% prefer service providers that can bundle the three solutions, according to the U.S. Bank 2024 Small Business Perspective survey released Aug. 26. 

While customers seek more digital solutions, financial institutions work to evaluate the best tools for them, Gary Brackenridge, vice president of lending and leasing at asset management firm Linedata, told Equipment Finance News. 

“We’re still learning how to best use the tools, but the governance and good business thinking required to leverage these tools should be business-need driven, not tools-driven,” he said. “What we have seen for the last 18 months in the AI space is people getting excited about a tool and then trying to find a business use.” 

Digital tools for fighting fraud 

Use of AI and digital automation is gaining traction in fighting fraud, Brackenridge said. 

As fraud has risen, so have the number of “very clever AI-driven solutions,” he said. 

“It’s the classic cat-and-mouse game,” Brackenridge said. “The fraudsters have gotten much more sophisticated during and, now, post-pandemic, but we’re now seeing these firms fighting back, and a lot of great startups in this space.” 

Historically, firms fought fraud by delaying decisions, Brackenridge said. 

“One of the standard practices is that if you see fraud starting to go up, all you do is delay every credit decision by ‘X’ amount of time, but that’s not a technology solution, that’s been a business process solution,” he said. “It has historically been true that you would then catch the fraud at a higher rate, so your fraud levels would come back down.” 

But today’s customer does not want to wait for decisions, Brackenridge said. 

Equipment lenders embracing the future

As a result, the equipment finance industry continues to manage technology adoption for cutting-edge digital tools, Zack Marsh, chair of the Equipment Leasing and Finance Foundation (ELFF) and senior vice president, accounting and analysis, at AP Equipment Financing, said in a Sept. 12 ELFF release. 

“While the equipment finance industry has traditionally been slow to adopt cutting-edge technology, our future success relies on our ability to embrace new advancements,” he said. “The foundation hopes that the [Industry Future Council’s] work influences equipment finance leaders to develop their own innovation strategies that lead to increased experimentation with emerging technologies so the industry is better positioned to thrive in the years ahead.” 

Small-business owners continue to embrace technology and show resilience despite stress from the economy, labor market, and higher prices and wages, Shruti Patel, chief product officer for business banking at U.S. Bank, said in the Aug. 26 release. 

“From the perspective of embracing the future, small-business owners and employees understand the critical role digital tools play in enhancing their business success and efficiency,” she said. “They also find AI and automated solutions to be an exciting prospect, but both have some apprehension.” 

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