Are Payday Loans as Addictive as Cocaine?

bolton-scarface-2

Frank Lopez: Lesson number one: Don't underestimate the other guy's greed![laughing] Elvira Hancock: Lesson number two: Don't get high on your own supply. -Scarface 1983 With all the noise around marketplace lending, I am digressing a bit on business credit to focus on payday loans and the recent discussions by the Consumer Financial Protection Bureau (CFPB) to protect users from the product.   In essence, the CFPB believes payday loan lenders must regulate who they lend to and how many times a borrower can renew a payday loan annually. Payday lenders of course believe these new rules would be game changers. […]

Blockchain Pressures SWIFT to Enhance Cross Border Payments

As most of us know that have sent a payment across borders through banks, I can travel from Vancouver, Canada to Barcelona quicker than money can get there. In fact, we know that if I send $100, the receiver will get something less, and neither of you know how much less depending on how many hands are in the pie taking a piece. The quest for real-time B2B cross border payments can seem like the search for the holy grail. So I was happy to see 21 banks are piloting SWIFT’s new initiative to improve cross-border payments. The pilot is […]

SAP & PrimeRevenue Partnership — Interview with PJ Bain, CEO of PrimeRevenue

Recently I had a chance to chat with PJ Bain, CEO of PrimeRevenue, and hear his thoughts around the firm's partnership with SAP. I always say there's one fact about a person that tells you a lot about him. PJ and I both enjoy sports, and I knew he played tight end on Georgia Tech’s football team. But I did not know he was a walk-on for those four years, which illustrated his passion for the game of football and his determination to be the best he can be. That passion carries over as CEO of a company he is taking to the next level with supply chain finance.

Revolution or Hype – Distributed: Trade Offers First Blockchain Conference on Trade and Financial Services

distributed.2jpg

There is a ton of talk about blockchain and how distributed ledgers can solve so many issues, but what is really going on beyond proof of concepts and a foot in the water with the technology? Blockchain technology has held out the promise of changing the existing trust intermediaries and making existing ones potentially unnecessary. Will this technology really revolutionize how business is done? Industry thought leaders will look to engage around this topic on June 14, 2016 in St. Louis at Distributed: Trade, the first global conference event focusing on blockchain technology applications for both trade networks and financial […]

Highlights of The Americas Alternative Finance Benchmarking Report

The Cambridge Centre for Alternative Finance and the Polsky Center for Entrepreneurship and Innovation at the Chicago Booth School of Business recently collaborated on research looking at the alternative finance space.  This report is the first of what will be an annual research collaboration. This is especially timely given the recent stumbles of OnDeck, Prosper, Lending Club and other marketplace lenders.  Many are questioning the online marketplace lending model.   Prosper decided to eliminate 22% of its workforce and OnDeck announced last week a much larger than expected loss due to flat loan volumes, narrow gain on sale margins and rising […]

Analytics as a Service

analytics

Is real time data access about to become a service? Surprise, it already has.   Whether it’s a loan decision, or to assess whether a new applicant is who they say they are, or is a payment fraudulent,  data is everywhere. The convergence of technology trends typically follow Moore’s Law – performance increases exponentially while costs fall.  Put together, it is a perfect storm.  The list below is but a sample: Cloud & Big Data Internet of Things Robotics Blockchain & Distributed Ledger Technologies Autonomous Vehicles Drones Vendors are capitalizing by using advanced machine learning algorithms to improve credit underwriting quality, […]

Is there a Complete Business Case for Reverse Factoring?

By now, we know the horse has long left the barn on Reverse Factoring as a technique for large Fortune 500 companies to extend terms.  Many of the top global companies use their own credit to deploy a "funding option" for their “short tail” or key suppliers  to access Libor-based funding for their sales to them. So while they are hitting their suppliers with the stick, they offer the carrot.  Several articles, including the WSJ article in April 2013, have cited multiple companies generating hundreds of millions of dollars each in operating cash flow by using this technique to support […]

Are You Financing Your Competition?

prisonerd

You can have anything you want But you better not take it from me – Guns N' Roses, “Welcome to the Jungle” (1987) If you have some knowledge of Game Theory, you probably heard about The Prisoner’s Dilemma Paradox. In the classic dilemma, two suspected criminals are given options to cooperate and there is a 2 x 2 matrix of outcomes across the "cooperate" or "not cooperate" axis. It explains why two apparently "rational" individuals might not cooperate, even if it appears that it is in their best interests to do so. Now I am not saying paying suppliers is […]