The 2022 Asset Finance Sector: A Battleground Where Technology, Appetite and Convenience Will Be Critical

Posted 14-01-2022


Leading asset financer Pepper Money on the trends and future developments for the sector in 2022.

Pepper Money is leveraging its scale, appetite, and technology as the “new major” in the asset finance sector having delivered 2.3x system growth in new consumer Asset Finance originations in 2021*[1], doubled its commercial Asset Finance volumes, grew its portfolio to over $3.3bn in assets under management, and financed 1 in 6 electric vehicles sold in Australia (at 30 June).

The leading non-bank asset financier offers finance to individuals and business providing flexible asset finance products including consumer and commercial loans, finance leases and novated leases.

Ken Spellacy, General Manager of Asset Finance at Pepper Money, says, “Our investment in technology, funding capability and broad credit appetite has contributed to significant increases in new business volumes, positioning us as the largest non-bank asset finance business in Australia.”

Commercial lending represented over half of Pepper Money’s Asset Finance total originations in 2021. Spellacy added: “Over the past 12 months we have helped more Australian SMEs access the equipment they need to grow. These strong results reflect the investment we have made in technology and the continued support provided to our introducer network driving month on month record applications and settlements,” he said.

Last year, Pepper Money announced a new strategic partnership with DLL, a global asset finance leader, to provide a joint wholesale and retail capability to automotive, caravan and recreational vehicle, motorcycle, marine and agricultural equipment suppliers in Australia. Dealers now have access to Pepper Money’s leading technology-enabled retail finance solutions combined with the scale and expertise of DLL’s wholesale finance business. The partnership aims to provide greater transparency to this market allowing brands, distributers and dealers to work with two respective industry leaders.

On his predictions for the sector heading in 2022, Spellacy said: “This year we can expect to continue seeing consumers and SME’s being drawn to finance partners that engage in a way that is relevant to them individually – particularly in respect to the growing demand for electric vehicles. As a financier, we need to provide the right tools in the form of technology, appetite and funding capacity to help our partners provide the best possible finance experiences.”

Spellacy adds, “Our digital plays over the next 12 months are designed to enhance our relationships with clients and we are leveraging our tech resources to simplify the finance journey, helping customers access the assets they need sooner.”

He added: “Kicking off 2022, we are really excited about the SME sector. As consumers start spending some of their record savings accumulated during COVID lockdowns, businesses will need to invest in assets to meet this demand. SME’s will be very busy so finance partners that can provide speed and convenience will be rewarded.”

From a dealership perspective, Spellacy says, “We’ve witnessed the purchase journey fundamentally shift over the past 18 months, with the online buying process continuing to trend. Customers expect simple and streamlined processes and lenders will need to support a range of assets and scenarios.

“Dealers need to up their digital game, and re-think how they respond to provide customer experiences seen in other retail markets. 2022 is the year to shake up their digital strategies and work with finance partners to ensure they are present at the beginning of the buying chain, not just the end.

From a demand perspective, Spellacy concluded: “Consumer sentiment is expected to increase as the economy heads towards full employment supported by strong GDP growth. Lifting of border closures will also likely see the hospitality and tourism sectors bounce back with increasing demand for commercial finance. While inflation and its impacts on debt capital markets is a consideration for all financiers, pricing discipline will become more important and put pressure on lenders who do not have the tech to deliver great experiences.

“New COVID variants pose a risk to consumer confidence however the experience of 2020/21 has shown us that even when broad sectors are locked down, consumer demand recovers quickly.”

[1] Source: Australian Bureau of Statistics Lending Indicators October 2021, New loan commitments, personal fixed term loans (seasonally adjusted), values, Australia – larger purposes

 

Media Enquiries or Interview Requests

Senior Marketing Communications Manager
Melissa Fanous
mfanous@pepper.com.au
0412 033 103