Category Archives: Technology & Platforms

Why Platforms Need to Monetize Their Supplier Ecosystem

Because P2P solutions started giving away supplier portals, cash flow optimizers, analytics, support, etc., they closed a revenue door. Trying to build a sustainable business model when half your ecosystem is not monetized is very challenging, even as P2P platforms add features and functionality. Sure, many platforms are trying to figure out payments, and that is something that scares the bejeebers out of them due to regulations and compliance rules. (Don’t pay that blacklisted vendor or person, or else.) But payments is not a profitable business for platforms, it’s a service.

Post-Confirmation Dilution in an Uncertain Credit World

e-invoicing

How long has this benign credit cycle been going on? How about since 2008, when the Fed began dumping money into the economy to go way beyond its mandate as a last-stop liquidity gap. This has led to many distortions in the credit and capital markets, and one area where this is poorly understood is around “approved” invoices. Despite what many players in the space might believe, underwriting is necessary — even  critical. Even though the invoices that are on the platform are, by definition, approved for payment (i.e., highly de-risked), they are by no means risk-free.

Intelligent Trade Finance: The Road Ahead

Spend Matters welcomes this guest post from Biji John, product manager, trade finance, at Finastra.

The trade finance industry is undergoing a unique moment of transformation. There is a virtuous circle between how the technologies of the fourth industrial revolution will enable trade financing, and how this in turn will power the innovation and adoption of these technologies in “Industry X.0.” In our last post, we explored ways in which AI, blockchain and the Internet of Things (IoT) will transform how trade finance is done. Here we explore some of the hurdles that banks face on the road to true intelligent trade finance, and provide some practical examples of banks that have overcome these challenges and serve as prime examples of intelligent trade finance in action.

Early Pay Finance Ain’t Easy: Understanding Customer Deductions

Every industry is affected by customer deductions. Called a variety of names by companies — including deductions, chargebacks or short-pays — from the perspective of a digital lender focused on invoice finance, understanding the nature of deductions is a first start to building smart underwriting and dynamic lending capabilities. Why? Deductions mean a diluted invoice value.

Intelligent Trade Finance: The Confluence of Blockchain and the Internet of Things

Spend Matters welcomes this guest post from Biji John, product manager, trade finance, at Finastra.

The fundamentals of trade and trade finance have not changed in centuries: it’s process heavy, with bottlenecks and disputes everywhere. Characterized by paper and manual operations, the back office is ripe for next-generation transformation. In the middle and front office there is potential for far greater automation and use of real-time data, for example in the accounts receivables process, in SME credit underwriting, loan booking, and monitoring and indeed for relationship managers (human and virtual) to surface and analyze data to gain insights and provide more data-driven recommendations to corporate clients along the financial supply chain.

Fintech or House Bank for Early Payment Solutions: Key Differences

There are three buyer-centric solutions to facilitate early payment for suppliers: supply chain finance, dynamic discounting and commercial cards (p-cards, v-cards). Bank-developed solutions in this space rely heavily on companies using credit lines. The focal point tends to be on p-card solutions, not dynamic discounting. Why? P-cards generate much more in fee revenue than dynamic discounting, particularly if a client uses its own funds to facilitate early payment instead of a bank credit line. 

Why Platforms and Source-to-Pay Networks Need Finance

More and more procurement software platforms and source-to-pay networks are receiving RFPs from clients requesting way to help improve working capital. Companies, even middle-market companies, have global supply chains. Working capital is important and could manifest itself in the form of yield management, ROI and balance sheet improvement. This is a box on the RFP that vendors need checked. But the path is not easy.

Using Information Advantages to Finance B2B Transactions

We've all heard the stories around how supply chains are digitizing. A real transformation is underway, no doubt. But transformations don’t happen overnight. Likewise, traditional forms of financing supply chains still dominate. Many new models of lending have emerged over the last few years that rely on the approved invoices and third-party money, and while some models have generated volume, these pale in comparison with total B2B transactions. This is not to say there are not failures. In fact, the innovations that have been tried and failed lead to further innovation, piggybacking off of lessons learned. 

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 […]

ERP Modules Important to Understand for Future Supply Chain Finance Structures

Many tech providers look at supply chain finance as a technology issue. An effective platform must take in invoices, provide dispute management, credit notes, audit […]

Replacement + Additive Deals to Fuel Supply Chain Finance Market

Banks have historically been the dominate provider of both platform and funding of reverse factoring (commonly called supply chain finance) programs over the last decade. […]

Leveraging Technology on the Buy-Side in Planning for Higher Interest Rates and Restricted Bank Lending

interest rates

Throughout this series, we have explored the role that the risk of rising interest rates and reduced bank lending to small and medium-sized businesses is likely to play in driving up supply risk, along with some of the foundational procurement-centric technologies that can help. Today, as we conclude this exploration in the final installment of this series, we’ll highlight just a few of the trade financing techniques and technologies that can help procurement organizations play a leadership role in proactively preparing for and addressing supply risk.