Will Trade Financing Bring About More Change to Banks or ERPs? [PRO]
We define trade financing as the combination of receivables financing and payables financing (inclusive of supply chain finance) and purchase-to-pay technologies, including e-invoicing. To say that interest in this area among large multinational corporations, banks, funds, ERPs and network/SaaS players is merely significant would be inaccurate. Rather, it would seem that the current emerging world of trade financing and its intersections with procurement, accounts payable and treasury-centric technology solutions is an area where more and more leaders – and I do mean leaders – are aware of what they don’t know, rather than what they do. Those which are taking action (a small minority at this point) are looking to enable a business model that can either help shape a new market opportunity; extend additional convention (e.g., invoice discounting) to drive greater adoption; or build a model that takes shares away from incumbents in the trade financing market (especially banks and factors). Incumbents that have not yet moved to understand the role of new technologies (e.g., supplier networks, e-invoicing, dynamic discounting, technology-driven approved payables financing, etc.) will either get with the program or lose business.