Digitisation is the process of converting information from a physical format into a digital one. Scanning a document via a scanner into a PDF is a good example of this.
Digitalisation is using digitisation to improve business processes.
Leasing businesses are traditionally paper businesses, with a lot of the contracts written between lessee and lessor written on paperwork that is sent between parties.
Leasing: digitisation vs digitalisation
The struggle that many have had since 2000 has been to digitise legacy contracts and to create a new business digital contract system including communications with customers.
Then, when digitisation has been completed, the race to digitalise, allowing for quicker customer response times through more effective underwriting, begins.
It is easier to protect against fraud and do background checks once a business fully digitalises.
However, risks arise through computer security and the stability of such systems.
Additionally, bank-backed lessors have struggled with different compatibilities of legacy systems.
Referencing improves when a business digitises, allowing for cross-referencing and business efficiency, which is digitalisation.
At last year’s Leasing Life conference, these digitisation vs digitalisation issues were discussed.
What customers experience in their everyday consumer life, they also expect of asset finance companies, said Bas van Asseldonk, DLL executive vice-president for Europe – and digital propositions should strive to meet those expectations.
“When we [DLL] talk about technology with our vendor partners, we constantly say that we need to go back to the end-users,” Van Asseldonk said. “Who is using it, and what is in it for them? To understand that, we put together customer journeys, and explored what parts of it we could influence using digital technology.”
Achieving a digitised customer journey is much more complex than creating a mobile app, said Van Asseldonk. “We did a lot of tech refresh programmes internally to make sure our technology were prepared for the future,” he says, citing the difficulties DLL encountered in having its legacy systems communicate with the new ones.
“We want to try, to learn fast, to think big,” he said, “but my team needed to learn to think digitally in the first place.”
But digitisation should not turn into a self-serving craze. Companies should still keep in mind that digital is just a tool, as Jochen Jehmlich, chief executive officer of Société Générale Equipment Finance (SGEF), put it.
“We do not build digital solutions because they are fun to play with,” says Jehmlich. “We do it with the idea that our lives, or customers’ lives, get simpler.”
Beyond buzzwords like AI and blockchain, the focus should remain on examples of concrete application.