I must say I was expecting this news for some time now. However, as they say, better late than never.
It is a fact that lending is the natural extension of payment services, especially when it comes to small-medium enterprises (SMSs). Well done, PayPal.
I think this will be a threat- in the short-medium term- more to credit card companies than to banks. I have seen some credit card players making steps into supply chain finance (after all that's what we are talking bout here)- e.g., Mastercard, VISA, Amex- with alternate fortunes.
Banks will follow suit down the drain if they don't find a way to properly assess and price the risk of their SME clients.
The solution? My current research on "actuarial tables" for supply chain management makes me believe the answer is there.
25 Sep 2013 09:34 Read comment
This interview validates what anticipated in https://www.finextra.com/blogs/fullblog.aspx?blogid=6729
24 Sep 2013 11:11 Read comment
The common theme of my conversations at Sibos was that in a period of recession and credit crunch the increasingly complex and costly support services within banks to serve their corporate clients are prime candidates for cost reduction and simplification. Since one of a corporation’s most critical processes is payments, banks are helping their corporate clients by focusing on streamlining payments processes.
The jury is still out to decide whether banks will still buld in-house or seek for external technology platforms.
20 Sep 2013 11:14 Read comment
This announcement is really important and validates what I anticipated about treasury management systems (TMS) becoming the platform for the convergence between cash and trade. While it is usually the norm to read about this kind of convergence happening on bank-owned platforms, the true element of innovation and competitive advantage is that the convergence runs on a TMS platform. The platform becomes the decision support system for the treasurer who can now control all the company's sources and destinations of cash from a single point of observation.
I expect the news will attract the attention of corporate treasurers.
It is a fact that the SaaS-based nature of both solutions has made the integration possible. IT managers wish little or no "intrusion" in their company's existing IT architecture.
18 Sep 2013 20:56 Read comment
I am normally cautious when commenting press announcements but this one is really important and validates what I anticipated about treasury management systems (TMS) becoming the platform for the convergence between cash and trade. While it is usually the norm to read about this kind of convergence happening on bank-owned platforms, the true element of innovation and competitive advantage is that the convergence runs on a TMS platform. The platform becomes the decision support system for the treasurer who can now control all the company's sources and destinations of cash from a single point of observation.
18 Sep 2013 20:57 Read comment
Very effective and informative interview. I would like to add one consideration: What the corporate wants is not (necessarily) what the corporate treasurer wants. It is not uncommon for companies to have internal ‘silos’ with lines of business (LOBs) such as sales, procurement, logistics, treasury and IT each having various goals that conflict, making it almost impossible for a bank to provide a holistic solution that addresses each LOB’s requirements.
Bottom line: There are many "customers" to serve. Some are just influencers while other are the decision makers. It is important for the bank to distinguish which is which and have for each a selected and tailored approach.
17 Sep 2013 21:26 Read comment
I recently posted a blog article on this topic in https://www.finextra.com/blogs/fullblog.aspx?blogid=8073
13 Sep 2013 21:04 Read comment
Tungsten has the right ingredients. But is Tungsten a good cook? Using another metaphor, they have key orchestra players, but is the director as good? I will like to see how Tungsten will blend the various ingredients to build a solid value proposition. So far they certainly enjoy not being a bank, therefore not being subject to regulatory restrictions and limitations. At least until shadow-banking will not be put under the scrupulous lens of the regulator. This gives them quite some room to operate. As in any supply chain finance program the issue is not to have a good lineup of technology and products, but to create value to the corporate user. That is something that technology cannot buy.
The fact they are not bankers also gives them additional edge, as a bank-centric strategy has never helped these initiatives to succeed. Just see what happened to JPM/XIGN, and, very recently, to USBancorp/VISA. Banks tend to buy/develop software and then use it for internal purposes before extending it out to clients. So the resulting solution (i.e, the "platform") is very effective at optimizing bank operations and STP at the expense of the end user who has to duplicate data and re-key information before enjoying the benefits.
The spend analytics component is indeed intriguing and shows a good vision. Again, only time will show how successful their approach of adding this component to the puzzle will be. In its own, spend analysis is not new. Certainly not for players of the likes of Ariba or Basware.
So I will carefully watch how Tungsten will make it a competitive differentiator.
06 Sep 2013 18:14 Read comment
This news signals that the BPO is moving out from the inner banking world and is now in open sea to prove itself as a true alternative to more traditional and paper-intensive documentary credit.
Nice to see that Premium Technology positions the BPO as a means for corporates to access pre-shipment supply chain finance instruments and for banks to reduce the inherent risk with such non-invoice-based instruments.
I will keep close attention as to how Premium Technology will leverage the experience that it will gain by selling BPO-enabled solutions. I expect such experience will be put at the service of the wider supply chain community where baselines are created not only through SWIFT's Trade Service Utility (TSU). I anticipate that true corporate value will be created when BPO-enabled applications will live their own life using any possible Trade Matching Application (TMA). The TSU is today certainly the most advanced (and perhaps the only) fully automated TMA but alternative TMAs will be created and will have to co-exist if the BPO is truly to become THE preferred instrument for open-account trade.
I'd like to see very soon Premium Technology announcing the availability of its BPO-enabled applications running on a second, and then a third, and so on, TMA.
06 Sep 2013 17:42 Read comment
Eventually this validates one of the findings I posted on a Finextra blog https://www.finextra.com/blogs/fullblog.aspx?blogid=6148 some time ago.
04 Sep 2013 11:13 Read comment
Transaction Banking
Financial Supply Chain
Treasury Management
Thad PetersonSenior Analyst at Aite Group
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