Time-to-yes. Scalability of the business in the asset financing business
Speed and efficiency of decision-making processes in leasing and factoring are key success factors. Those who want to remain or become competitive must ensure short processing times, high customer satisfaction, high quality and low costs in order to achieve the goal of efficiently expanding business volume.
Georg Müller, Managing Director of abcfinance GmbH, was speaker at the SCHUMANN Digital Credit Risk Management Conference 2021 and gave a deeper insight into how abcfinance is reacting to changing market surroundings.
With a yearly new leasing business of 1.1 billion and a factoring volume of 3.5 billion, abcfinance is exposed to strong competition from huge, well-established banks. They had to find a way to improve their products and services towards their customers and to build a USP.
Legacy system encounters digitalisation
But how to make an established organisation fast and efficient? How to speed up business development?
abcfinance took the decision to found a new company named abcfinlab. Its target is to develop digital financial services that combine innovative means of communication and state-of-the-art technologies, thus enabling paperless and automated processing without media discontinuity. Doing so, the company must stick to all the regulations imposed by the market authorities.
The initial situation of abcfinance can be characterised by the following features:
- Tailored financial solutions aligned towards the individual needs of their customers
- High-tech financing (e.g., shipping and media sector)
- Personalized service and wide range of flexibility
- Direct contact and 24/7 service
The goals of the digital online business can be described as follows:
- No need for personal contact in standard bulk business
- Meeting all regulatory requirements within few minutes
- Reduction in processing time and costs: fully digitalized after-sales service
- Improvement in quality (standardized processes) and increase in customer satisfaction
Thinking from scratch
According to Georg Müller, the advantages in founding the new company are that developers and managers can think from zero outside and independently of the existing group, which offers totally new perspectives to ensure:
- Developing digital natives as a new target group
- Securing the existing target group through digital offerings
- Generating significant radiation effects on existing organisation
- Optimizing cost-income ratio in this area/in this target group
Leasing done in less than 10 minutes
abcfinlab has developed their first new product in leasing business, “Lease Seven”. It enables their customers to make a leasing contract in less than 10 minutes. To achieve this goal, following digital processes had to be implemented:
- Intuitive and dynamic rate calculation
- Easy financing decision incl. credit checks in a few seconds
- Digital money laundering process & electronic signature
- Fully digital processing of the acceptance
- Upload automatic invoice reading
- Contract activation
The automation of processes is a prerequisite for such an accomplishment and requires high-performance technology
SCHUMANN’s loan origination software CAM Financial Services is the core system for the complete decision and risk management. The new web-based solution at abcfinance and abcfinlab since May 2021 provides interfaces to external partners and credit agencies, full set of functionalities, modules and process control for high automation, e.g., determination of the companies’ financial substance and creation of borrower units, as well as meeting regulatory requirements. For the near future, further improvements are planned, such as the automation of annual financial statement analysis, the implementation of all requirements of vendor financing or new interfaces to credit agencies.
abcfinance GmbH is part of the Werhahn Group, a family-run company established in 1841. Werhahn Group has more than 10,000 employees worldwide. The group is divided into three divisions: Building materials, Consumer Goods and Financial Services. The last unit is the one where abcfinance, abcbank and Bank11 belong to. abcfinance is active in Germany, the Netherlands and Austria and target small and medium sized enterprises.