Leasing Insights Blog

The Future of Banking

The Future of Banking


The old adage, “change is the only constant” has taken on newfound importance in this century. Newer, faster, crowd-sourced and social — change is coming at an astonishing rate, and it is picking up speed.
This is excellent news: your mobile phone has replaced your digital camera, paper airline tickets, GPS, and has literally put the power of the internet in your pocket so that you can instantly and accurately look up the answer to nearly any question. Truly, the current state of technology is an awesome human achievement.
According to Brett King, Author of the books Bank 2.0 and Bank 3.0, ten years ago, no one could have predicted that we would come so far, so fast. Today, a remarkable 90% of daily transactions are electronic, internet banking provides more revenue than branches, social network conversations are the primary means customers use
in deciding whether to trust your brand, and growth in mobile banking has heavily impacted branch banking.
For companies that have not significantly changed their operational model in 100 years, these recent years have been challenging – and the challenges will continue to mount.

For example, Amazon.com’s revolutionary model of posting ALL customer reviews of products it sells on its site — not just the positive ones — has made transparency the expected standard. Gone are the days when brands could dictate to customers what to think. Perception is no longer reality; reality is reality. And social media tools like Twitter have given regular people the power to spread positive and
negative buzz about businesses’ non-transparent dealings and outmoded practices at a rate faster than ever before.

The Customer Experience: The Competitive Advantage

This new era of openness means that excelling at the customer experience is the new key competitive advantage. Customers today demand convenience and  a high degree of functionality that gets them to the finish line in a highly efficient manner.
“On the web and on mobile, the customer isn’t king — the customer is dictator. Highly impatient, skeptical, cynical,” said Gerry McGovern, author of Killer Web Content.
This advice is important for any organization. The current reality is that every single customer touch point is a crucial part of the overall customer experience, and customers have extremely high standards. The commercial lending industry is no different. Electronic channels are no longer addendums to the main branch channel. In other words, the future of lending is centered around the customer, not centered around the branch.

Once the sale-and-leaseback is finalized, the lessee will receive 100% reimbursement of the acquisition cost of the equipment included in the lease. When this occurs, ownership of the equipment is transferred to the lessor and lease payments begin.

Time Sensitive

The growth of personal technology solutions is another important piece of the puzzle to consider. Powerful handheld devices now mean that customers execute highly efficient transactions and receive fast and accurate service. This phenomenon has fundamentally “shifted  the way we value our time, set expectations and perceive ourselves in the environment,” said King. He goes on
to say that the most critical drivers for internet lending success are companies that provide their customers:

  • Convenience 
  • Control
  • Simplicity

For this reason, on the consumer side, customer-centric web stores like Amazon have achieved great success.

Amazon tells you the whole, crowd-sourced truth about all of its products, and also refrains from
telling you what to buy. Rather, they make customized suggestions, designed to save you search
This customer-centricity has moved into the commercial lending space as well. For example,
e-signature platforms make it possible to sign multi-million dollar equipment finance contracts in real time, right from your smart phone. When you compare that level of convenience to receiving an overnight package, or even a PDF attachment, hand signing it, scanning it and sending it back overnight or email – versus a signature in real time, at your convenience – the path is clear.
Beyond that, gone are the days when C-level executives could spend the entire afternoon with their equipment lessor. Time is far too precious for that. Now, virtual meetings, right from their desks are a far more practical and efficient way to hold a “face-to-face” meeting.
Business customers today demand the best and most convenient technology, because they have become connoisseurs of that kind of service in their consumer lives. And commercial lenders who understand this new path will be able to meet their needs — and exceed their expectations — now and in the future.

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First American Commercial Bancorp, Inc. is a wholly-owned subsidiary of City National Bank. Deposit products and services are offered by City National Bank Member FDIC. City National Bank is a subsidiary of Royal Bank of Canada. “First American Equipment Finance” is the trade name for certain equipment leasing and finance businesses of First American Commercial Bancorp, Inc. and its subsidiaries. Equipment financing transactions are provided in Canada by FA Equipment Finance, Inc. For California clients: Loans made or arranged pursuant to a California Finance Lenders Law license. All transactions are subject to credit approval. Some restrictions may apply. All trademarks are the property of their respective owners.

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