AI use, ageing fleets, and growing EV sales are all set to impact the asset finance industry, according to COG Aggregation’s head.
COG Aggregation head Mark Rayson has outlined the biggest opportunities he sees for the asset finance industry and how the aggregator plans to capitalise on them.
Speaking exclusively to The Adviser at COG’s Asset Finance Brokers Conference last week, Rayson said COG was taking a “cautious approach to AI”, but acknowledged the massive opportunity the tech presented to brokers and aggregators.
“From our perspective, I think it is the way of the future. There will be a point in time where that [technology] starts driving some of our behaviour,” Rayson said.
Rayson said AI’s ability to analyse client transactions and retrieve data could improve COG’s broker technology.
He also noted its potential to automatically find policy information within COG’s broker central platform and suggest suitable lenders for brokers.
Asked about COG’s plans for new tech over the next couple of years, Rayson said: “Our systems and processes should be built around creating better efficiencies for brokers, so they can do things faster and cheaper.”
COG is focusing on improving front-end systems to collect client data more effectively, so applications are mostly pre-built before reaching brokers.
Rayson noted that there is still limited trust in AI, but views the future as an “augmented workplace,” where AI supports brokers to work more efficiently rather than replacing them.
COG is investing heavily in COG Connect, the aggregator’s client management and loan processing system, having spent $5.1 million on Connect already and budgeting a further $1.4 million on the system this year.
The aggregator is beginning to roll out new features and updates, Rayson said.
Ageing fleets and EVs will drive growth
Commenting on the biggest opportunities for COG and asset finance as a whole, Rayson said: “We’re certainly driven by the market. I see growth as the market starts to expand.”
He noted that despite relatively soft sales across the industry for cars and trucks, the average vehicle fleet age has risen from 13 to 15 years, suggesting a major replacement cycle is coming as older vehicles wear out, creating opportunities in asset finance.
“There is a big opportunity looking at that fleet age, just from a dollar perspective. That’s not us doing anything crazy or special. The data says at some stage people are going to need new or more efficient trucks,” Rayson said.
The search for more efficient vehicles will also drive an uptick in electric vehicle (EV) adoption, Rayson said.
“There will be a switch to EVs,” Rayson said.
“You look at what China’s going to do with the EV cars coming here. They’re going to be pushed here, whether we like it or not. And they’re going to be at price points where people are going to go: ‘You know, I can’t not buy, the alternative is too expensive’.”
However, Rayson said there were still infrastructure issues with EVs, like limited charging availability, which pose practical challenges for EV users and limit wider uptake.
[Related: COG Aggregation head hails broker network as cornerstone of success]
