Factoring & Invoice
Building an innovative platform to provide customers with instant access to financing and wide investment opportunities.
More and more companies understand that, in today’s global and increasingly competitive economy, it is essential to approach all facets of a business in a holistic rather than siloed fashion. This 360-degree view of a company is changing the way operations are managed and tasks are completed, especially within the procurement and finance functions.
At the same time, small companies still face an uphill battle in securing the payments and funding support they need. Customers demand extended invoice payment terms, sometimes up to six months, and raising bank finance to cover outstanding invoices is an onerous and often unsuccessful process.
Technological innovation offers new ways of addressing these funding challenges and promises to forever change the financial services industry services offering. Trade finance is transitioning from an old-fashioned, paper-based industry dominated by traditional banks to a digital offering from which transactions can be largely conducted, and funded, online.
Access to digitally-based alternative lending provides SMEs with the cashflow lifeline they need to compete with their bigger rivals. Banks, and particularly large banks, are geared for customers that require significant loans. Meantime, the small business owner doesn’t get the same quality service, waits longer for their loan application to be approved, and, after completing all the administrative requirements, their request for funding is often turned down.
Banks have also reduced their exposure to trade finance over the last few years, only servicing their largest multinational clients. Strict capital and regulatory compliance rules have increased the costs of doing business and eaten into profitability. Geopolitical uncertainty is also prompting banks to become more conservative in extending loans for import/export trade, particularly in developing countries.
Fortunately, technology is changing the trade finance playing field. From startup fintech platforms and specialist boutique firms through to tech giants, it has enabled new non-bank (alternative) finance providers, to disrupt the industry and gain an increasing share of the trade finance market.
Banks are partnering with innovative and agile new entrants that are not weighed down by inflexible cultural or regulatory constraints. These new incumbents have a fresh way of doing things that is especially appealing to GenX and Millennial clients frustrated by traditional bank formalities.
The client set out to build a B2B working capital marketplace that would bring together suppliers and buy-side enterprises by facilitating financing, payments and e-commerce. The company wanted customers to have easy access to the funding platform, with an electronic Know Your Client (eKYC) process and online credit scoring that enabled them to raise working capital for any type of transaction. It needed to be a scalable, all-in-one solution that harmoniously united E-invoicing and ERP functionalities, as well as offering advanced integration capabilities.
The company had already explored some of the existing market solutions. But it had encountered two problems: the platforms didn’t offer all the functionalities in a single solution, and platforms developed elsewhere were not tailored to satisfy specific local African requirements, including compliance standards, integration capabilities, efficient processing of small transactions.
Therefore, one of the main challenges was to find a provider that was capable of meeting these requirements and in a position to develop a solution that was much needed, yet completely new, to the local market.
Velmie was chosen as a strategic partner for this project, due to its proven experience in the financial services industry, its extensive portfolio of FinTech products developed for the African market, and its ability to deliver highly-customized solutions.
The project began with detailed research and analysis to better understand local market specifics, customer needs, and current infrastructure limitations. As a result, we jointly defined the project’s strategic goals and agreed on the scope of the overall solution. Velmie offered an all-in-one white-label platform that was able to unite buyers, suppliers, financiers, and service providers in one digital, collaborative environment, thereby enabling them to interact freely and securely within approved rules and regulations.
Since the platform was built using a microservices approach, its architecture makes it possible to easily add new workflows, features, and integrations, thereby allowing the company to respond quickly to changing market demands and take advantage of new business opportunities.
Powered by an enterprise-grade core banking system, the platform was designed to effectively and securely manage all aspects of e-invoicing. The system was built to enable hassle-free user experience by completely digitizing and automating the invoicing process, while meeting local compliance regulations.
One of the capabilities the company wanted to be set up was a secure, automated and intelligent identity verification process. We integrated a configurable KYC module into the platform to enable the smooth onboarding of new users and give clients tiered permissions. The platform can also be equipped with Machine Learning and Artificial Intelligence tools for advanced KYC process management.
For the user’s convenience, the platform was also equipped with the extensive integration capabilities with external platforms, such as banks, payment service providers, CRM/ERP systems.
To ensure the solution met local infrastructure requirements, we not only provided a technology solution but also established an agile, dedicated team to deal with the custom development, integrations, architecture design, QA, and other services that require both technical and industry competencies.
The system was successfully deployed to the client and now the customer operates on a fully-fledged reverse factoring solution. It is tailored for regional conditions and aggregates e-invoicing, advanced user management, integration with external platforms, and many more functionalities. It has enabled the company to grow rapidly, onboarding more and more clients, building additional functions and adding customized capabilities for the key clients.
The benefits of the solution to the client include:
A scalable, future-proof system capable of handling exponential growth in the number of users and transactions.
A strong competitive position, due to proposing an innovative and highly demanded solution for the B2B financial market.
Radically improved customer experience due to the digitalization and automation of the procurement and financing processes.