Key Trends in Commercial and Asset Finance for 2024 (2024)

Now we are settled into the 2024, it is a great opportunity to evaluate the trends and expectations within the Commercial and Asset Finance industry for the year. With technological advancements, changing customer behaviour and global economic shifts, It is crucial for businesses who utilise finance in these sectors to stay updated with the latest trends. In this blog, I will highlight how the key trends that are likely to shape the Asset and Commercial Finance landscape in 2024.

Digital Transformation – The finance industry has been gradually embracing digital transformation and this trend will continue to accelerate in 2024. Companies are likely to invest heavily in technologies surround artificial intelligence, machine learning and streamlining operations. With key benefits, such as enhancing customer experience, speeding up decision making processes the investment in digital transformation is likely to pay dividends to both consumers and brokers / lenders alike. By the end of 2024, digital platforms will be the norm, credit decisions will be faster, transactions will be seamless and there will be a greater ability to automate more creative and tailored decisions.

Alternative Lenders – From the start of the 2020’s, alternative lenders, such as peer-to-peer lending platforms and fintech startups have gained significant traction for both asset and commercial finance. Throughout the year, these non-traditional lenders will continue to disrupt the industry by providing innovative financing options to SMEs. Their ability to leverage technology, data analytics and flexible lending criteria will give them a significant advantage over traditional banking institutions for certain industries and markets.

Sustainability Focus – Environmental and sustainable policies will continue to shape the way in which most businesses operate to a certain extent. With new technologies and de-carbonisation programmes requiring ever increasing amounts of funding, the industry is likely to see the breakthrough and acceleration of specific products designed to fund programmes, products and companies for specifically sustainable and environmentally beneficial products. This will align with growing consumer requirements for products to be sustainable and carbon neutral and as demand for these products and services increase, so will the landscape of the lending behind the providers. On the flip side of this, lenders may also need to factor in the quick nature of changing legislation in certain industries when calculating the risk of longer term funding.

Enhanced Data Analytics – Data has become the lifeblood of the finance industry and nothing will change here in 2024 and beyond. Asset and commercial finance companies will continue their investment in advanced data analytics tools and platforms to develop a greater understanding of consumer behaviours, market trends and creditworthiness. The use of predictive analytics will be beneficial to end consumers as lenders should be able to place a greater certainty on products being suitable for the loanee’s needs and they will be able to place a greater confidence on the loanee’s affordability criteria.

Of course, there is no certainty where 2024 will take us, whilst most businesses thrive global stability, there are already events happening around the world to suggest that this may not be the year for it. Most businesses have adapted a strategy of forging forwards with investment programmes and growth strategies. There will, with almost certainty, be a continued surge in investment into sustainable and environmentally positive technologies as well as AI based technologies. These are not easily calculated risks for lenders to provide solutions for, however with advancements on their own side of the desk, for those lenders who can provide exciting and innovative products there are certainly great rewards to be won.

If you're interested in Commercial and Asset finance then talk to an expert partner of ours - Arran Turner at Sorbus Finance.