Is a Revolution Coming?
Kevin F. Clune, CLFP
No, I am NOT referring to the Presidential Election!
Piggly Wiggly revolutionized the grocery shopping experience 100 years ago. Can Fin-Tech do the same for the lease-finance industry? An ingenious man named Clarence Saunders opened the first self-serve grocery store on September 6, 1916 in Memphis, and the chain is now celebrating their centennial.
Before Saunders embarked on this daringly new concept, grocery shopping was a time consuming process in which a clerk had to scurry around to gather all the items on a customer’s list. Mr. Saunders correctly calculated that a much faster, relaxing, & personal grocery shopping experience would attract customers, and the benefit of increased business outweighed the risk of loss from theft.
When I read that the SEC is hosting a public forum to “discuss financial technology in the financial services industry”, I took notice. They have touted it as having “the potential to transform virtually every aspect of our nation’s financial markets”.
With all this buzz about the “Fin-Tech” innovations, will this new technology be as revolutionary to the equipment lease finance industry as Piggly Wiggly was to the grocery business? What are the benefits vs. the risks? How can the risks be minimized?
Fin-Tech is basically a term used to describe access to “big” data and technology for completing business loans and equipment leases in a fraction of the current time. It is ballyhooed as a boon to the business owner who needs a quick and easy lease or prompt infusion of cash. It is also beneficial to the creditor who will be able to grow its’ portfolio more quickly.
Regardless of the type of credit transaction, the biggest fear is fraud. Applicants need assurance that their credit information is safe against hacking and other forms of theft. Creditors need to trust that the vendor and the applicant are the entities they claim to be. All parties should be certain they are dealing with reputable businesses to minimize any of these risks.
Since consumers have come to expect self-serve grocery stores and also instantaneous capital loans and leases, providers will need to deliver. This is the price of progress and revolution. (Be sure to vote.)
Can we assist you with any of your finance needs?
Kevin F. Clune, CLFP
Clune & Company
