Tungsten’s Analytics Offers Banks a Challenge

Citibank takes Spend Analysis one step further with new Integrated Payable Solution

Citibank’s Integrated Payable solution tool is an example how a bank can leverage their payment and finance capabilities and combine them together with analytics. The bank has Innovation Labs in Tel Aviv, Singapore and Dublin and this initiative came out of the Singapore Lab as a working capital tool. It takes both in-house data and client data and puts forth some observations and what-if analysis.

What makes this solution powerful is that it sits across a number of business units for the bank, including trade finance, commercial cards, and lending.

The solution takes a corporation’s spend file and recommend various ways the company can improve their cash flow and working capital. The focus is to provide a corporation with recommendations on what works best for their direct spend, indirect spend, intercompany spend, and perform scenario modelling.

While one must admit that the vendor doing both the analysis and recommendations of their own products has a conflict of interest, the bottom line for a corporate is that you get data where improvements can be shown, whether that be commercial cards, dynamic discounting, or Supply Chain Finance.

As part of this analysis, the bank has the opportunity to analyze the corporation’s suppliers globally to see if they can offer finance opportunities to them as well. Think about that for a minute. If you were a supplier in Turkey supplying some citrus juice ingredient, and Citibank knows your sales to your client, the potential to offer Distribution finance and other financing techniques is enhanced.

But the recent announcement from Tungsten with their Analytics tool provides an example of how banks are under threat from P2P Networks. As my colleague Peter Smith said in his recent post, Tungsten’s product and process is different, in that the data is picked up in a virtually “real-time” manner directly from the invoice via the Tungsten platform. As an electronic invoicing company at heart, Tungsten has the ability to pull the appropriate detail from the invoice, at an invoice line level, and on a very regular basis. - See Tungsten plays a a Whole New Spend Analytics

The other key difference is that P2P networks enable clients to do their own modeling. Unfortunately today with the banks, the tool is not a client use tool, but one the bank manages.

Still, the sophisticated analytical capabilities together with the working capital product recommendations are a compelling offering. Many banks talk the talk with their Treasury consulting groups. Citibank is putting data behind it.

Shameless self-promotion: Each day I get reader emails asking how to sign colleagues up to Trade Financing Matters. It’s simple, just have them go here. Spread the word…

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