NASHVILLE — The commercial equipment financing industry has been slower to adopt technology than the auto industry, in part because new services have been considered secondary to sales. But more recently, lenders have been embracing technologies to better serve their customers and increase revenue.
“The progression of technology has been very fast,” David Costa, chief technology officer of Kubota Credit, said on May 7 at Equipment Finance Connect 2024. “It’s given us a lot of opportunity to just refresh our investments in our core platforms. It’s also allowed us to become much more granular in our interactions with dealers.”
“With dealers, a lot of our focus and investment is about being able to deliver those services to the entity at the edge as rapidly as possible,” he said.
Panelist Beckham Thomas, founder and chief executive of commercial equipment finance software provider TRNSACT, added that “generally, [finance and insurance] is considered to be the highest gross margin contributing component of any auto dealer. But when you switch into commercial equipment, it’s not something that most commercial equipment dealers would care about. It’s described as an afterthought.”
Thomas is aware of dealers who don’t get involved in financing or prefer the customer bring it to them, he said.
But “every dealer needs to have a finance function,” Thomas said.
Meanwhile, Eric Pettigrew, director of financial services at truck and trailer group Doggett Freightliner, noted that the technology required to manage fleets is not where it should be for many operators, adding that the tech on actual equipment is lagging.
In “a lot of cases, it is still the old way of a fleet manager managing five or six drivers and dispatching them and managing that manually,” he said. This is happening “with the support of technology of course, but not to the level it should be.”
However, state regulations are increasingly prompting investment in technologies that will ensure operators and lenders remain in compliance.
State security requirements “have risen dramatically, so that will spur [technology] investment, which is what we’re seeing,” he said.
The “silver lining for clients” is that technology can assist dealers in matching their clients’ security requirements, Kubota Credit’s Costa said.
Proud Member Of
Check Out Our Industry Event
