Supply Chain Finance Platforms should rethink business models

As I watch the race to go after the large pie that represents trade credit on corporate balance sheets, many of the platform providers have different business models and forms of revenue creation.

A platform business provides:

  • A network layer that connect all the sides – Buyers, Sellers, Banks, Others
  • Tools and rules layer to provide the necessary visibility and certainty required for finance partners to make decisions
  • A data layer and structure that drives customer interactions in web, mobile and other digital channels.
  • In addition, some will offer supplier adoption services which can include web training, document management and customer service. And many are adding Analytics to support customers working capital analysis as the cull through spend data. Taulia recently introduced a product to provide payment trends called Taulia Analytics.

Some platforms are now of significant size – think of Basware or Ariba’s network, or the amount running through PrimeRevenue monthly. It is substantial.

Many vendors continue to make money by selling software. Some have subscription models that are paid by the buyer and sellers use the service for free, others charge basis points for transactions that flow through, and still others may use some revenue share on rebates, or a combination of these.

But if you look at all the data that these networks contain, new services could be created on top of that data.  Intuit is a company that built a whole suite of products around their data. Banks don’t sit on both buyer and seller data that B2B and Supplier Networks do.  The world of business credit is surprisingly unconnected. But having real data, not survey data, puts these platforms in a position to create all kinds of services – for institutional investors looking at risk, to banks that want to analyze industry sectors or supply chains to corporates that want to compare payment terms.

Of course data privacy issues must be overcome, but better data leads to better decisions, and I think its only a matter of time before these networks start monetizing their data.

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First Voice

  1. Anthony Awasom:

    In need to learn mpre on the alternative sources of revenue for a trade finance platform for Africa

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