EQ Riskfactor: Receivables Finance Industry Lagging Behind in Digitization

EQ Riskfactor, a provider of risk management software for the commercial finance market and part of Equiniti Group, launched its new international report, Finding Your Competitive Edge with Technology.

The new report surveyed senior professionals from the receivables finance industry across the UK, United States, Germany, France and the Netherlands. The report explores the lasting impact of the COVID-19 pandemic on businesses during 2021, the repercussions of the withdrawal of government support and how lenders can use technology and data to help them gain competitive advantages.

Many consumer finance service firms have already made the move online, but the research in the report showed receivables finance lending is thought to be lagging behind. Global respondents reported that only 20% had onboarding processes that were mostly automated, while 80% of receivables finance lenders are not benefitting from automation.

More than 50% of those surveyed have plans to implement digitization over the next two years; however, the data also showed that implementation doesn’t always go smoothly. The main obstacles preventing successful adoption were shown to be challenges using legacy systems (20% of respondents) and a lack of senior stakeholder engagement (18% of respondents).

“The receivables finance industry still has a long way to go in terms of adopting automation, in particular during the onboarding process,” Michael Ellis, managing director at EQ Riskfactor, said. “There is desire within the industry to speed up digitization and automate more processes, but we believe more progress can be made. Customers are increasingly expecting immediate responses and frictionless access to cash across other products. It is now time to action this approach in receivables finance.

“Whether it is an end-to-end transformation or a more focused adoption, the technology lenders’ embrace must provide value across their business. One of the easiest ways to ensure senior stakeholder buy in is to include them from the very outset. This not only makes them part of the decision-making process; it also makes it easier for them to see the long-term benefits. Wider adoption will then be much easier with them leading the charge.”