Receivables Finance Lenders Feel ‘Positive’ About 2022

EQ Riskfactor, a global provider of risk management software for the commercial finance market (part of Equiniti Group), launched a new international report, Navigating 2022 and Beyond.

As part of the new report, EQ Riskfactor interviewed senior professionals from the receivables finance industry across the UK, the United States, Germany, France and the Netherlands on what lies ahead for receivables finance lenders in 2022. The view across international borders did not waiver: Receivables finance lenders are feeling positive and optimistic about the year ahead.

Driven by government support schemes coming to an end and increasing demand for finance, expert consensus states there is a vast opportunity for lenders to attract new customers, even those that would have previously been cash secure and not considered receivables finance as a working capital solution.

Despite the opportunities, some challenges remain and the operating environment remains fluid, meaning successful lenders should embrace the uncertainty and remain responsive and agile to quickly changing conditions, according to the report.

Increased competition is also expected to be a factor within receivables finance. To meet the challenge, lenders will seek to invest in technologies which help speed up and optimize processes both for themselves and their customers, according to the report.

To support enhanced risk monitoring, lenders expect to use far more extensive and diverse sources of data in 2022 to make better informed decisions, according to the report, which further notes that through comprehensive data sets, lenders can gain greater insights and flag potential risk at the time of onboarding and throughout the client life cycle.

In 2022, having the right quality risk metrics, auditing tools, KYC processes and monitoring triggers within a remote environment will be essential to assess risk, prevent fraud and grow portfolios, according to the report.

“It is reassuring to hear in our report that lenders are feeling confident and optimistic about the year ahead,” Mark Watkins, director at EQ Riskfactor, said. “There are definitely many positives in the market, yet despite this, lenders will still need to overcome challenges. Those that employ technology to help them respond to fast changing conditions will be best placed to overcome uncertainty and gain competitive advantage. Data and technology together will improve speed of decision making and ongoing risk monitoring, benefitting the overall customer experience both through onboarding and ‘in-life’ relationship with the lender.”