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The success of innovative tech companies like Amazon and Netflix is having an impact on the equipment leasing and finance industry, with consumers increasingly looking for digital options, according to a study by specialist consultancy The Alta Group.

Its 2018 benchmarking survey and analysis on the pace of digitalization in the asset finance industry was produced collaboratively by consultants in North America, Latin America and Europe.

John Rizzi, leader of Alta’s digital business advisory practice in the US, said: “There are organizations that have recognized the disruptive nature of digitalization and have or are in the process of transforming their business models in substantive ways. However, the research suggests that these are in the minority. Many respondents who fully embraced the change to digital business models recognize that measured success will lead to more widespread adoption.”

The study’s authors says fintechs have spurred competitive pressures, but another key driver of digitalization is that customers are increasingly influenced by such consumer digital services as Amazon and Netflix, which have raised service expectations.

The research found 77% of survey respondents reported their digitalization strategy is mostly focused on the front end, but noted they are dealing with multiple constraints. These include current legacy systems, mentioned by 90%, while problems in recruiting or a lack of the skills needed was the second most-widely reported constraint.

In addition 84% identified challenges posed by the need to re-engineer business processes, and a smaller proportion also noted misalignments with partners or vendors.

“It was interesting to note that digitalization appears to have had the widest impact on customer facing aspects of the business such as improving service and meeting customer expectations,” Rizzi said.

Respondents were also asked whether their company infrastructure enabled them to gather data, participate in a wider digital ecosystem and exploit new technology such as artificial intelligence, machine learning and blockchain.

Rizzi added: “It was also notable that relatively few respondents reported that digitalization had significantly impacted business key performance indicators (KPIs), though it was apparent that many felt it was too soon to tell.”

The study, Benchmarking the Pace of Digitalization in the Asset Finance Industry, was completed by Rizzi; Richard Ryan, The Alta Group-EMEA (Invigors); John Hurt, The Alta Group – US; and Roberto Fernandez, The Alta Group – Latin American Region.