Two New Foundation Studies Will Soon Hit the Streets
Posted 05/06/09
Two new studies by the Foundation will be available soon, including research on bundled transactions and credit scoring.
Considered a “new” old-way to do business, the industry has turned its attention once again to bundled solutions financing. Bundled Solutions Financing: How These Transactions Differ From Business As Usual for the U.S. Equipment Leasing and Finance Industry? was produced by Accenture, and provides a point of view on a set of critical questions facing the industry today regarding the use of bundled solutions financing. The questions include whether or not this approach will persist as a procurement option, the future potential of this financing structure, and the degree of impact they make on the industry, itself. The study then provides guidance to the benefits and drawbacks to engaging in bundled transactions.
The study finds that nearly all executives at major industry providers (who were interviewed for the study) reported their companies were involved in financing technology-focused bundled contracts to some degree. Some participants also reported that bundled financing now constitutes a majority of their overall financing in technology, specifically.
Additionally, customers are demanding bundling more, which is pulling (rather than driving) the industry along in this form of financing, points out the study.
How Good is Your Scoring Model? tackles the topic of credit scoring. Produced by PredictiveMetrics, Inc., this study will attempt to determine the impact of the recent economic downturn on the predictive capacity of scoring models. As credit scoring models have grown in popularity in the equipment finance industry, many companies have grown dependent on these tools. The study will address whether or not an over-reliance on automated scoring models has replaced human judgment, and in fact stressed the models beyond the scope of their original intent and design. The study will examine trends, practices and controls to gauge the potential exposure within the industry and provide recommendations where attention may be necessary.
Both studies will be available later this year. Watch for news about these studies and other projects in future issues of Foundation Forecasts or visit the Website .
