More than Just a Signature: Equipment Leasing Discovers Next Level of Digital Transformation

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Have you had the opportunity to read the March/April 2015 NEFA Newsline magazine? If so, you may have noticed a familiar face on page 27. Our very own John Jacobs, Director of Business Development at eOriginal, discusses how the equipment leasing industry can benefit from digital transformation.

Electronic signatures have become all the rage in various industries, including equipment leasing and finance. However, the concept of e-signing is too often restricted to the most visible part, the signing ceremony.

This misperception may be part of the reason adoption of digital transaction management (DTM) has been a bit slower in equipment leasing than other major industries, such as auto finance, wealth management and insurance.  For example, in the automobile industry, more than 17,000 franchises have at least one electronic signing capability for their customers, while Nissan Motor Acceptance, Ford and Toyota all report that more than 50 percent of their transactions are being done digitally.

Meanwhile, in equipment leasing, it is estimated to be in the single digits. However, that is beginning to change.

When a Signature Is More Than a Signature

Unquestionably, there is a lot of value in eSignatures. They represent what many consider the culmination of the deal, as it creates the documents and the acquisition of signatures embody the final outcome.

Simply by eliminating the fax machine and mailing, you are able to significantly reduce the sales cycle. Moreover, an electronic signature process eliminates errors and omissions that may cause needless delays and an endless back and forth.

For example, by automating the process, the signer cannot go to page three of a lease, if they haven’t initialed on page two.  Additionally, in instances where there is a co-signer, the document cannot be forwarded until the primary signer as completed all of the required steps.

By providing more process controls and rules, ensuring completeness, eliminating double manual-entry, lessors discover efficiencies and are able to expedite the entire contracting process.

Beyond the Signature

Indeed, the greatest opportunities to realize savings, discover efficiencies and maximize financial flexibility are on the post-signature side of digital transaction management.

The creation and transfer of contracts are key business processes for many National Equipment Finance Association (NEFA) member companies. These contracts are the basis for the financial assets of the companies. As a result, it is essential to find a legally binding solution that provides a complete audit trail of all the event electronically through the life of the contracts.

Also, a DTM system should enable users to not only import and export these assets, but also provide specific controls and privileges amongst different stakeholders and parties that are passing, trading, viewing or otherwise managing these valuable post-signature assets.

This is why the eOriginal eAsset® Management platform is designed to ensure that each electronic asset is managed with the highest levels of security and compliance, maintaining the authenticity of the original documents and the integrity of their content throughout the entire lifecycle of the transaction.

Key features for post-signature management should include the ability to create an authoritative copy of an asset, manage that asset, securitize that asset, and pledge or collateralize that asset. The solution should also enable Transfer of Location of Electronic Contracts (TOLEC) functionality, pool creation, and transfer of ownership or control.

In an era of increasing compliance demands and security concerns, these features may ultimately prove the most valuable to more and more third parties – whether a bank, a custodian or a regulator – each must be able to access and manage the contracts in an appropriate digital environment.

A True End-to-End Solution

To get full value, a DTM solution should integrate into other back-office systems to take full advantage of the efficiencies of digitization. These systems may include those used for financial management, accounting, accounts receivable/accounts payable, enterprise resource planning, contract management, origination, customer service, channel systems (e.g., web, mobile, email) and other relevant systems. It is important to have a solution that has a robust API capability and a rich funder and partner ecosystem that support integration so that the end-to-end process is fully digital and easy to deploy.

For NEFA member companies, contract digitization is a potent opportunity to meet their enhanced customer experience and sales efficiency objectives, while creating a compliant and secure post-signature digital process that will increase financial viability and growth opportunities.

While the move to digital has been a bit slow in the equipment finance and leasing industry, now is the time to start the conversation about how digital tactics can help reduce costs and increase revenues per sale. As industry adoption continues to grow, going digital will not just be an option, but a necessity to remain competitive.

©2015 This article originally appeared in the March/April 2015 issue of NEFA Newsline Vol. 7 No. 2. All rights reserved.