Captive finance organizations are critical to the success of the equipment financing industry, but limited systems integration with parent organizations is creating a barrier to innovation.
For captives and their parent companies, connecting the digital ecosystems of both organizations is the greatest roadblock prohibiting innovation, according to a recent study by Paris-based Capgemini released by the Equipment Leasing & Finance Foundation (ELFF), which notes that “90% of captive [respondents] identified limited integration with internal and external systems as their greatest challenge with their current technologies.”
Many captives are challenged with integrating their legacy software into the parent organizations’ more modern systems, leaving them to play technological catchup.
Macroeconomic challenges including inflation, supply chain disruptions and rising interest rates further limit growth in equipment and software investment, making it more challenging for captives to improve their systems integration. Corporate equipment and software investment was predicted to grow by 5.9% in 2022 compared with 13.1% in 2021, according to the report.
“We are now in a time where equipment finance organizations, including captives, must address customer centricity, operational resilience and business awareness to remain relevant,” according to ELFF.
The Equipment Leasing and Finance Association (ELFA) is the parent organization for ELFF. Washington, D.C.-based ELFA is the trade association representing financial services companies and manufacturers in the nearly $1 trillion U.S. equipment finance sector.
Editor’s Note: This article first appeared on Equipment Finance Connect, a new event from Royal Media focused on fostering best practices in the equipment finance industry and revealing opportunities for value creation at your enterprise. Visit https://equipmentfinanceconnect.com/
