How automotive industry leaders are using the power of asset financing software

Business leaders in the automotive sector are confronting new challenges all the time. Turning to asset financing software can help – but they must ensure their chosen platform is efficient and reliable.
Motor Finance Online
an image of a digitally shielded electric car. Credit: O-IAHI via Shutterstock.

Credit: O-IAHI via Shutterstock

It is a turbulent time for the auto industry. GlobalData projections suggest the market for battery electric vehicles will achieve growth of almost 16% per year in 2024 – up from a rate of around 1% per year in 2017. Supply chain disruption is wreaking havoc, with semiconductor shortages particularly problematic; losses to light vehicle output were worth nearly ten million units in 2021 and a further seven million in 2022 according to GlobalData figures. Dual pressures from macroeconomic uncertainty and the need to hit increasingly stringent environment, social and governance (ESG) goals means auto operators of all sizes are having to rethink long term strategies.

Despite these headwinds, much has remained the same. Consumers may be more environmentally conscious and financially wary, but their need to get around hasn’t changed. In fact, as developing countries get richer, automobiles are more in demand than ever. Firms looking to expand need the same toolkit as ever: ready access to finance alongside the ability to manage loans, lease agreements and other aspects of automobile sales swiftly.

Asset finance is helping enterprising automobile industry chiefs keep abreast of developments. Igor Szabados is Director of Business Development in the EMEA region at Alfa, whose flagship product, Alfa Systems, enables auto firms to access and manage asset financing opportunities. Among his clients’ major demands, he says digital sales channels, product flexibility, system scalability and data deployment stand out. “Finding the right partner with the delivery track record of making business changes happen can help realise the benefits for the given organisation,” says Szabados. Doing so could make the difference between exploiting potential opportunities in a growing sector or being buffeted by winds of change.

Auto asset financing: what you need to know

Auto finance software platforms are making waves in the European automotive industry. They offer comprehensive solutions throughout the auto sales funnel, providing unparalleled financial control and maximum oversight. They have a number of important benefits.

One is automation of the financing process. Loan applications, underwriting and finance procedures are onerous tasks, subject to human error. But the programming power of an asset finance platform can remove the stress by handling these tasks on a finance department’s behalf. Accelerating approval of applications, economising on manpower and eliminating the potential for staff to be wrongfooted can all improve overall operational efficiency.

Another benefit of auto finance software platforms is their robust reporting and analytics capabilities. Advanced reporting tools that generate real-time, accurate analysis of performance indicators, portfolio health and risk assessment give dealerships and finance companies valuable insights into their operations. With novel access to actionable data and analytics, decision-makers can make informed strategic decisions, identify trends, and optimise business processes.

Third, regulatory requirements – which can be a significant challenge for asset financers – are made significantly easier to manage with a comprehensive platform solution. Auto finance software platforms incorporate compliance features and ensure adherence to industry regulations. They enable companies to manage compliance-related tasks efficiently, such as tracking regulatory changes and implementing robust risk management practices. And by mitigating compliance risks, auto firms can focus on their core business activities while maintaining a strong reputation in the industry.

But onboarding a new asset finance platform is a big undertaking – one which comes with two vital considerations. First, integration with other industry software. Ideally, platforms must be integrated with accounting software, inventory management systems, and other relevant applications. Doing so successfully can help dealerships and finance companies streamline their operations and guarantee meticulous accuracy from finance data – wherever and whenever it comes from. But such integrations cannot be an afterthought; finance firms and their platform partners need to prioritise them from the outset.

Second, data migration. During the implementation of any new IT platform, data migration plays a critical role in ensuring a smooth transition from old systems to new. And, in the age of GDPR, knowing where your customer data is and how it is used has never been more important; crucial historical data needs to be retained during platform decommissioning to minimise disruptions while maintaining a firm’s integrity and smoothing the transition. Asset finance platform providers should be able to offer expertise in data migration, helping companies undertake a seamless transfer.

The Alfa way

How can dealerships and financers utilise asset finance software while skating around the potential implementation pitfalls? Enter Alfa Systems, a platform promising to optimise the financing process with its suite of industry-leading features.

Among Alfa Systems’ advantages, it gives dealerships and financers everything they need in a single stable product – one that is, crucially, built on a cloud-native architecture. “For some global organisations, the ability to host in the cloud and provide support around the clock is among their primary goals,” says Szabados. “Those operations have a clear competitive advantage in their ability to originate deals across geographical borders, launch new asset finance programmes in multiple markets, offer usage-based services and monitor cross-company customer risk for better credit decisions.”

But Alfa Systems is more than a product – it is a partnership. “At Alfa we invest heavily into selecting, training, nurturing and retaining our staff,” says Szabados. “These people become true industry practitioners – and that is appreciated by our clients.” Alfa’s investment in the retention of its exceptional staff means customers are invariably working with the sector’s standout experts.

Integration and data migration are smoothly taken care of on the Alfa Systems platform. The software uses sophisticated interfaces and comprehensive APIs to ensure compatibility with accounting, inventory management and other relevant auto industry systems – guaranteeing streamlined operations and enhanced financial data accuracy. The platform also incorporates high levels of automation, enabling mass changes and fast-tracking business processes through workflow rules. And Alfa is an industry leader in data migration, having already migrated millions of units of data from legacy systems onto its platform.

The benefits don’t stop there. Alfa’s commitment to continuous improvement is evident in its substantial investment in product development. The industry average for product research and development is 11% of total revenues. At Alfa – a single product company – that figure stands at 24%.

“We invest heavily in our product and it is one of our differentiators,” says Szabados. It has allowed the platform to adopt automation capabilities, revolutionising the financing process by eliminating the potential for human error. Loan applications, underwriting and other financing processes are all taken care of on the platform – supporting the entire customer journey via its always-on functionality.

A full-scale software transition is a daunting task for any business – and initiating one in the fast-evolving automobile industry can feel particularly momentous. Szabados’s top tip? “Do thorough research of the market, opportunities and solutions available: the functional fit, the technical fit, delivery track record and the commercial fit.”

In doing so they can futureproof themselves against rapid evolution – and he argues that Alfa, where innovation is “embedded in the company culture,” gives financers and dealerships all the reassurance they need.

Recreated with permission from Motor Finance Online.