Technology & Innovation Forum – “Speed to Payout”

Building on the lively atmosphere at September’s Technology & Innovation Forum, there was further, candid debate at our recent October online meeting, where we continued our discussion of the potential for transformative improvements in the Prop-to-Payout journey, this time with a focus on the Speed of Payout KPI.

There were also some new takeaways:

• Offered a choice between People, Processes, Data or Tech as the biggest obstacle to improving Speed of Payout, half of the group picked Data (versus last time, when half said that Tech was the greatest barrier to faster Speed to Decision).
• When asked to provide more detail as to the nature of the Data challenges, the majority of participants identified incomplete or inconsistent documentation as being the issue.
• However, the context and background of that issue “incomplete or inconsistent documentation” seemed to fall into two, distinct categories:
  • Changes to proposal data between the point of submission or approval and the arrival of the final documentation for payment.
  • Submission of payment documentation prior to or without the resolution of open credit approval conditions.

And of course, all of these issues come together at the conclusion of the Prop-to-Payout process, and when both introducer and funder are under time pressure, as well as having competing interests.

Some participants provided compelling insights into the scope for improvement in process performance, with nobody offering any significant experience or evidence to the contrary:

• Three-quarter of deals require corrective measures prior to processing payout.
• Average total deal processing-times are three times longer for proposals with issues versus those without.

The temperature increased a little when considering carrot versus stick as a means to incentivise improvements in process performance, whether from the perspective of the terms offered to dealers/brokers, or the assessment of internal teams and their compliance with standards and procedures.

In the end, in common with our previous outing looking at Speed to Decision, and apparently along the entire Prop-to-Payout value chain, when asked what the biggest non-data challenge might be, the forum members settled on Communication, which included unclear ownership of the responsibility for problem resolution.

These last two sessions have provided plenty of material for the next in-person meeting at the Asset Finance Connect conference in November. We are really looking forward to presenting our findings to a leadership panel, drawn from the Technology & Innovation Forum membership, and bringing it to the attention of all AFC conference delegates as part of the morning agenda.

Then, the afternoon Technology & Innovation Forum will take up the task of defining root causes and clear problem descriptions, so as to begin the search for solutions. We’ll be sharing more details about these sessions in the coming weeks.

The Technology & Innovation Forum is a community of tech experts, non-tech influencers, and technology decision-makers, specifically for individuals working for motor and asset finance providers. By joining, you’ll be a part of an exclusive group dedicated to driving digital transformation in the finance industry, providing the opportunity to network with like-minded professionals, share ideas, and stay ahead of the curve.

The Technology & Innovation Forum is open to AFC’s lender corporate members. To learn more or register, please contact Ariana Pragana at arianapragana@finance-connect.com.

Not yet an AFC corporate member? Get in touch with AFC’s Business Development Director, Joe Nilsson, at +44 (0) 7379 096 111 or joenilsson@finance-connect.com.