AFC conference: driving better outcomes

The Asset Finance Connect (AFC) summer conference, headline sponsored by Alfa, saw some 500 delegates fill the rooms to hear industry leaders, innovators, and changemakers across the auto, equipment, and asset finance world consider the way forward for a sector which has experienced more than its fair share of regulatory, legislative and economic challenges over the past year.

Chief among these is the Supreme Court appeal hearing on commission disclosure and fiduciary duty, which is not expected to deliver its decision until mid-July.

As AFC CEO Edward Peck outlined in his opening remarks, many lenders and intermediaries may feel that the prospect of a multimillion-pound redress scheme hanging over their heads is the signal for market withdrawal or a sharp change in risk appetite.

Yet despite the turmoil created by legal rulings, which might have dampened demand, Peck pointed out that there are no signs that consumers’ appetite for car finance has diminished, suggesting that a happy customer is no longer the way to judge success.

“The problem is the policymakers and the focus on regulation. We see this also in the SME lending market where appetite to borrow is low and rejection rates are high, making many SMEs ‘borrowing lepers’,” Peck declared.  

Better outcomes

Against this background, the conference focus was on driving better outcomes, with close analysis of whether or not the go-to-market approach for auto and asset finance needs a reset, to the benefit of customers, lenders and intermediaries.

Introducing the keynote interview with John Phillipou, chair of the FLA and managing director of SME Lending, Paragon Bank, Peck paid tribute to Phillipou’s dedication in marshalling the resources to tackle challenges which few other chairs have faced and his willingness to extend his term of office to manage the transition to Shanika Amarasekara’s arrival as the FLA’s head from August.

This collaborative approach is also evident in the key industry development announced at the AFC conference, which is a new agreement between the FLA and the NACFB on broker reviews designed to demonstrate a commonality of standards and raise the credibility of the overall marketplace.

“This is really significant and good news for the whole industry, because we are seeing two trade associations working together to help support and manage the broker/lender relationship,” Peck said.

Talking to interviewer David Betteley, AFC community head for auto finance, Phillipou emphasised that “the end point is to have best practice across the industry and better outcomes, rather than a super-regulator.”

“The sector is not broken and doesn’t need fixing. However, lessons will be learnt. It’s not that we as an industry were asleep at the wheel, but some topics had been brewing for years and probably not got the attention of some stakeholders. We’ve got to identify how to evolve our approach so that doesn’t happen again.

“But another key objective is to get the message out about what asset finance is and what we do. There’s a tendency for the media to pick up on the bad news, and we are not so good about pushing the good news,” Phillipou explained.

SME challenges

While FLA members provide £155bn of new finance overall to UK businesses and households, the SME sector is under-represented, with research from Allica identifying a £65bn funding gap in this area given the sharp fall in successful applications from 1990s levels.

A suite of AFC conference sessions looked at how asset finance providers, including challenger banks, can work to fill that hole in a sustainable way. Presentations considered a range of factors behind the decline in SME lending, including the shift towards service sector businesses with less collateral; a regulatory regime which discourages riskier lending made to businesses with a good business plan but less collateral; the demise of the traditional bank relationship manager role; and borrower reluctance in the face of well-publicised banking scandals during the financial crisis.

“Added to that, we are seeing intense price competition and margins at record lows, so some challenger banks are pulling back because they don’t see the returns,” noted Allica CEO Richard Davies.

Questioned by the practitioners’ panel – a new conference innovation designed to offer industry specialists the opportunity to question speakers  – Davies said that to address this block “we need a more diverse way of looking at risk and reward, rather than herd behaviour.”

In a follow-on session looking at building the customer journey, NACFB CEO Jim Higginbotham pointed out that the appetite of would-be SME borrowers has been influenced by “years of finding it harder to get approval, with 40% of applications declined at the moment and no help on how to get debt-ready.”

“SMEs flow like water and we have to create the easiest path for them to follow,” Higginbotham added.

For lenders, this funding gap is an opportunity, with participants pointing to the role of the British Business Bank’s growth guarantee scheme (GGS) in supporting SME lending, universally acknowledged as an important safety net.

Richard Bearman, BBB’s co chief banking officer, told delegates that “The GGS deals with the issue about the changing nature of collateral on a loan. It takes an element of risk out of the deal and enables lenders to find the spot where they can make a difference.”

Many also agreed with Higginbotham’s analysis that better education and awareness for SMEs about what asset finance offers, coupled with more adoption of AI could help turn the tide.

“SMEs and intermediaries are often time poor, so using technology to reduce the friction in the application process makes sense. And more widely available information about asset finance would mitigate some of the lack of holistic expertise which disappeared when the traditional bank manager went,” Higginbotham explained.

AI works

A number of conference sessions considered the impact of AI on the asset finance sector, alongside a suite of workshops looking at how to take the tech from pilot to profit, tips for building the business case, how to deploy agentic AI, and live demonstrations, with sessions facilitated by Alfa, CGI, Finativ, VIP Apps Consulting, Salesforce, Lendscape, Nivo, CarPass and Solifi.

AI was also the topic of discussion in the AFC Soapbox Project, where Richard Huston, VAMOS managing director, Jason Hurwitz, NETSOL sales director Europe, Tom Perkins, director and co-founder of Charles & Dean, and Graham Lines, head of product at Novuna Business Finance discussed whether AI could co-pilot SMEs who seek credit.

Future focus

And in AFC’s ever popular industry debate, the motion under discussion was whether the auto and asset finance industry needs to re-set its intermediary-focused go-to-market strategy.

For the motion, Rees argued that “people and profit; environment; tech; and service (PETS) meant a “deep reset” was required but not “destruction” of traditional models. Gibbard shared this view, citing what he labelled “driven change” with his GROW approach (government; regulators; oversight; widening market).

In opposition, Betteley saw fundamental change as “like pressing the panic button”, arguing that it is the regulators who require a reset, while for Roelefs such a move is akin to “pressing reset on your iPhone and deleting  your whole life.”

The packed conference day concluded with a drinks reception, giving delegates the opportunity to continue the debate about the future, share experiences and follow up on the presentations from over 40 speakers.  

Edward Peck, AFC CEO, said: “The quality of discussions, both the formal sessions and the networking opportunities, reflected the health of the industry. It is clear that the way forward is for all participants – lenders and intermediaries – to collaborate to build on the auto and asset finance sector’s strengths and to demonstrate its professionalism, as evidenced by the FLA and NACFB’s work on broker reviews, as well as its contribution to the UK economy and growth.”

More insights, thought leadership articles, and conference highlights and reviews from the AFC UK Summer Conference 2025 will be shared shortly – stay tuned!