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Driving Innovation – The Time is Now

February 12, 2013, 07:00 AM

On February 8th I was invited to attend a roundtable discussion in New York City hosted by Knowledgent, Inc., a consulting company focused on delivering innovation through the utilization of information to various industries including the financial services industry. This roundtable session was attended by leaders of various bank-owned, independent and captive equipment finance companies as well as other industry professionals. The topics covered were many, with the primary focus on how equipment leasing and finance companies of all types can and need to optimize their operational efficiency via the utilization of technology in order to effectively compete both today and in the future.

My interest in attending this meeting was based upon years of discussions with numerous equipment finance professionals from all levels who have indicated their companies lack the systems and even more clearly, they lack the knowledge to build the required systems to fully maximize operational efficiency. Meanwhile, many leaders within the industry fully believe that maximizing a finance company’s operational efficiency is critical to achieving long-term success and gaining a competitive edge in the evolving equipment finance market. As a result, some companies have begun working toward this goal and made various investments toward operational improvement, but many have yet to make the deep dive into innovation.

Like companies in other industries, many equipment finance companies struggle with this concept of implementing innovation. After all, it’s complicated and expensive with no immediate ROIC. Furthermore, the recession negatively impacted finance companies in so many ways that making investments in systems upgrades and operational efficiency understandably have taken a back seat to plain old survival. Surprisingly though, investing in operational efficiency also took a back seat even during the years of the economic boom when the focus was on volume, volume and more volume.

Today the industry seems to be at a crossroads – should equipment finance companies take the deep dive and invest in innovation today to increase the chances of financial success in the future, or is it just fine to continue unchanged for now and invest later? That’s not an easy question to answer as each company is facing unique challenges that can impact this decision.

The roundtable session was spirited and provided a few key insights:

  • Small ticket independent finance companies seem to hold a fundamental belief that innovation and efficiency is a key to their competitive success.
  • Middle to large ticket bank-owned lessors view their services as somewhat commoditized leaving them little choice but to compete on price in many cases.
  • Large ticket lessors understand the need to cut operational costs to offset tightening margins – margins that will likely remain tight into the near future.
  • Some bank lessors find it difficult to drive innovation within a large bank structure.
  • The evolving regulatory environment is creating the need for bank-owned leasing companies to take stock of their operational and reporting efficiencies now.
  • Attracting and retaining customers based on delivering superior customer service is important, but easier to accomplish in the small ticket market. Large ticket lessors see pricing as the biggest competitive issue today.

What was clear from this meeting is that equipment finance companies understand that investments in technology should be strategic and must be designed to not only close the gaps in operational efficiency, but also to meet the long-term business goals of these companies while keeping a close eye on customer satisfaction.

I left this meeting asking myself a few questions: Are the leaders of equipment finance companies ready to truly embrace the fact that they can empower their businesses through the full utilization of information and technology? Do equipment finance leaders fully understand what is actually possible with an advanced data model the way the financial investment and pharmaceutical industries are currently doing? How much stronger would employee/employer relationships be if both are enlisted into the development of a superior platform – one where ownership belongs not only to management, but also to those utilizing the system daily in credit underwriting, asset-management, portfolio management, sales, syndications, and transaction pricing?

Technology is nothing without people; but together, people and innovative technologies can empower equipment finance companies and their clients to achieve true long-term partnerships, enabling them to maximize the value of the lessor/lessee relationship. The time is now to start driving change toward operational innovation.

Founder / Publisher | Equipment Finance Advisor
Michael Toglia's experience in commercial finance spans over 30 years having held various roles in senior management, business origination, capital markets and commercial credit underwriting. Prior to entering the publishing industry, Toglia served as Vice President of Capital Markets and as the National Sales Manager for both the Equipment Finance and Asset-Based Lending Divisions of Textron Financial Corporation. He also held various roles with General Electric Capital and CIT Group.

Toglia currently serves on the Equipment Leasing and Finance Association's Service Providers Business Council Steering Committee and the ELFA's Communications Committee. Toglia has also served as Marketing Chair, for the Turnaround Management Association (TMA) Philadelphia/Wilmington Chapter.

From 2018 - 2020, Toglia served as the Executive Director/CEO of the National Equipment Finance Association.

Toglia holds a Bachelor’s Degree in Accounting and an M.B.A. in Finance.

Contact Michael Toglia at 484.380.3184 or

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Comments From Our Members

John Barry
Great article, Mike. It all comes down to people, process and technology. Companies must invest in all three areas to be successfull.
3.12.2013 @ 9:51 AM

Michael Toglia • View APN Profile
Thank you John!
3.12.2013 @ 10:06 AM
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