We are living in an age in which technology is revolutionizing the way we operate within our personal lives and across industries. Increasingly, it’s changing the way the financial services industry operates, marking clear trends within fintech companies and specific innovations. At a recent roundtable in London, Enrico Camerinelli, senior analyst at Aite Group, joined a panel of working capital experts, including Mark Tweedie, U.K. corporate banking head at Citi Institutional Client Group; Charles-Henri Royon, VP EMEA at Tradeshift; Sandy Kemper, Founder and CEO of C2FO; and Mark Thomas, director of client operations, EMEA at C2FO, to discuss fintech’s effects on working capital.
“Evolution or Revolution? The Impact of Fintech on Working Capital”, commissioned by C2FO and produced by Aite Group, discusses the value financial technology (fintech) innovation brings to working capital evolution.
Key takeaways from the study include the following:
- The 2008 credit crunch can be thought of as an asteroid that hit the earth, making dinosaurs extinct and allowing species that lived in small niches to survive and flourish thanks to their capacity to adapt to changed environmental conditions.
- Fintech firms are nimble companies that have taken advantage of the crisis, while banks have been going through a severe existential change. Emerging fintech firms have the ability to change and positively disrupt existing models.
- Fintech solutions support working capital optimization by fostering collaboration between buyers and suppliers. Problems emerge when trying to reach out to the thousands of lower-tier suppliers (i.e., the suppliers’ suppliers). This “long tail” is probably the most interesting because companies here are craving money, but they have no idea how to participate in the program. Fintech providers can handle the middle of the tail.
- Savvy banks are looking at technology entrants as an opportunity rather than a threat and are increasingly becoming aware that investments into these new technologies must go beyond pouring in money, as the real investments are in education, awareness creation, and really understanding what corporations want.
- Companies must look with confidence at banks that partner with fintech firms that create transparency through new paradigms and new systems. These are solid alliances that connect those that have the money with those that are looking for money.