Small Bank in Kansas Building Platform as a Service Model

Talk about innovation. Forget blockchain. A $17 million-asset bank in Weir, Kansas is behind some of the most innovative developments in banking. A recent American Banker article caught my eye when Ex Google exec and now CBW Bank banker Suresh Ramamuthi created a health care payment portal using an API marketplace for companies to build their own products and services atop the bank's homegrown technology. CBW Bank has a truly audacious approach to the market. Simply put: it wants to blow up convention and launch an API marketplace for certain industries including, potentially, money services businesses. According to Ramamuthi, "You […]

Factoring Volume Growth Shows Mixed Regional Results

Factors Chain International (FCI), a network that includes over 290 factoring companies worldwide, gathers factoring volumes through its local members and can get a per country view on volumes (although there are organizations that are not members so that data would be missed). The data may not be totally comprehensive but it gives us a good estimate at factoring volumes globally. According to FCI data, Factoring achieves all-time high in 2015:  € 2,373 billion euros, up 1.4% from 2014 However, the growth recorded in 2015 is well below the seven-year trend annual growth rate (CAGR) of 9% Domestic factoring accounted […]

Its 2016 & Banks Rush to Defend SCF in Light of Abengoa

“Balance sheet treatment of APF is hot (post Abengoa).” Senior Trade Banker So all of a sudden I hear just because one analyst from Moody’s publishes a note on Abengoa’s supply chain finance structure, the banking world is up in arms about supply chain finance (“scf”) as an accounting trick to disguise leverage. Please. First, aren’t these the same rating agencies that rubber stamped those Mortgage securities. I won’t digress, since they are the only game in town, but let’s remember the devil is in the detail. No two scf legal structures are alike because the agreements and contract language […]

Are China’s Banks About to Be Bailed Out? – Impact on Trade Finance

We know to mistrust any data coming from China, but certainly bank data on non performing loans even more so. Optimistic accounting can rule the day and the difference between saying you have 3% nonperforming loans on your books to 10% or even 15% is drastic. According to China Banking Regulatory Commission data and PriceWaterhouse analysis, Chinese non performing loans (NPL) are still below 2% but growing fast. Even the Chinese regulators will publicly admit the trend is negative. Shan Fulin, chairman of CBRC commented "At the end of 2015, commercial bank non-performing loans increased for 17 consecutive quarters, and […]

How EInvoicing is Turning Invoices into Currencies in Latam

Kenneth Bengtsson, CEO at Efact, gave an interesting presentation at Exchange Summit Orlando on Peru’s efactoring solution that has recently become law (Law #30308, Peruvian Factoring Law, approved March 2015).  In going beyond a simple efactoring solution, what the Peru Government did was to enable a commercial invoice to become a true tradeable asset – so an invoice which states you owe me $X can be traded just like a share of stock.  The Government has developed a central securities depository where the invoice is registered, similar to the U.S. Depository Trust Company.  In this case it is called CAVALI.  […]

How Blockchain Will Underpin the Future of Global Trade Finance

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I am moderating a panel today on the above subject and there is certainly a lot of noise and seed funding going on in trade. Why trade? It seems there are many reasons why this area is getting much attention: I think the first reason that comes to mine is the amount of paper involved across custom agents, forwarders, ports, sellers, inspection agencies, insurers, banks, etc. One piece of paper in that long chain can certainly be a problem, and usually starts with Import Customs. Settlement delays inhibit trade Bank trade finance alternatives are costly Blockchain applications around Global trade […]

What investors Should Care About in this New Era of Non Bank Lending

Gordon Gekko: The point is ladies and gentlemen that greed, for lack of a better word, is good. Wall Street (1987)   Think about the two main risks an investor who buys a security accepts: credit risk and operational risk. When I buy a bond as an investor, I am buying some future cash flows - the bond’s interest stream and principal repayment.  With Alternative Finance, I am usually buying receivables with they hope I will be repayed. So let’s look at Credit Risk first.  My concern should be on the counterparty to the transaction.  I buy some right to that stream […]

Why 2016 is Not Proving to be a Transformational Year for Business Finance

If you build it, he will come. Field of Dreams, 1989 Basware’s CEO Esa Tihila made the comment that 2016 will be a transformational year for business finance. And yet midterm results indicate that prediction is not living up to expectations. With more than $2 trillion of business credit outstanding at any time, most cloud-based financing over B2B networks that offer just-in-time financing is only doing a trickle of that volume.  Tungsten released their recent finance results. I will let you make your own conclusion. In the financial year (FY) that just ended, Tungsten financed invoices for 79 suppliers totalling […]