Factoring: modernisation in the cloud

A new way of factoring offers a lot of advantages over the cumbersome processes built on the static legacy IT systems of the past. Users these days want to be able to quickly and easily onboard clients and invoices anytime, anywhere, and from any device. They also expect integration with other online tools and services, such as credit checks. And how about actively managing receivables without having to wait for overnight batches? That is modern factoring, and modernisation in the cloud can make it possible!

Why flexibility is the key innovation in factoring  

The most important challenge for financial servicing today is how to speed up the digitalisation of operations. Pressure from the client side is also high, as they increasingly expect an entire customer journey to be conveniently digital. Their customers have become accustomed to taking care of business whenever it is most convenient for them. They also want to do so through the channels that are easiest for them to use. That choice of channel is becoming more often than not, a digital one. 

A lot of factoring providers are still hampered by cumbersome legacy factoring systems consisting of hardware and software. To make matters worse, these are systems that they own and have to maintain themselves. These systems are often older and have become increasingly complex over the years. Consequently, this makes them difficult and expensive to maintain. Keeping a self-owned system flexible enough to add new features and functionality easily is also highly impractical. Organisations sometimes outsource their IT maintenance and management to offshore service providers. However, that usually doesn’t make the systems any more flexible. 

At the same time, the financial services industry is changing at breakneck speed. Factoring systems need to be flexible enough to allow quick modifications. This way the ever-changing needs and digital expectations of today’s clients can be met. For many companies, a modern SaaS cloud solution could be the ideal answer for more flexibility and efficiency. Cloud services make it possible for companies to use a variety of devices to serve their customers in real–time. As a service, the software is continuously updated. As a result, effectively removing the need for clients to deal with the hassle and limitations of legacy systems.  

We cannot solve our problems with the same thinking we used when we created them

-Albert Einstein
Modern factoring is fastmobile, and connected 

Our ‘always online’ society expects fast digital solutions to everything. That expectation applies to factoring, too. Right now, for instance, factoring services are being digitalised with the automation and full digital support of processes on the operational fulfilment side.  

Jotting down information on a sales call for processing when you get back to the office isn’t a very effective way of operating in today’s digital world. Clients want to get started immediately so they can invoice customers as quickly as possible under the new factoring system. When the system can make the onboarding fast and easy – and from just about any device – clients get the speed they expect.   

Making this possible requires the system to have excellent API-connectivity. Optimal connectivity is an important factor to consider when choosing a cloud service. It means that other online tools and systems such as CRM and credit scoring can be integrated into the factoring system relatively easily, giving them direct online availability. This integration allows you to onboard on location, and invoices can be entered into the system in pdf using OCR technology instead of requiring manual data entry. 

Modernisation in the cloud leads to more cloud advantages 

Lowering operational costs to stay competitive is crucial for many companies. One way to do this is by drastically reducing the time it takes to handle cases. A big advantage of always being online is the ability to process data in real–time. This is far superior to having to wait for (overnight) batches. Managing receivables all happens in real–time, from processing payments to sending reminders.  

Cloud solutions also make factoring an interesting option for companies with unpredictable volumes. A quality cloud service can continuously monitor volumes and system speed so that capacity can quickly and easily be scaled up or down without disruption. That kind of flexibility is nearly impossible to create in a static IT system.   

With a more advanced platform, there are also endless possibilities for new applications using the latest technologies. Machine learning for credit scoring in the credit management process is just one example.   

And last but certainly not least is the fact that these types of platforms tend to use the most advanced state-of-the-art security solutions and update them continuously. Companies that offer SaaS are acutely aware of all the potential cybersecurity risks. Consequently, they often provide the most robust software available to protect their clients. For example, at Aptic, we use the Microsoft Azure security software within the meticulously protected Microsoft cloud for our fintech platform. This ensures our clients are always protected with the most recent cybersecurity. In addition, they do not have to spend any time or money on it themselves.  

Modern factoring 

When we truly look to the future, state-of-the-art platforms are opening up possibilities for developing new types of services. Services such as reverse factoring, supply chain financing, and business lending with or without collateral. In a fully digitalised operation, multiple opportunities can arise for the modern factoring service provider to apply the latest technologies, such as machine learning, for credit risk scoring.  

The good news is that Aptic offers companies the possibility of starting with a completely new system that’s fast, flexible, and intuitive in a matter of just 1-2 months and with a relatively small investment if they have no special need for complex, tailor-made solutions. Would you like to find out more about Aptic’s solution for modern factoring, Cloudware, that is specifically designed to meet the needs of the truly digital online community?  You can read about the impressive list of features available in our whitepaper.

Are you in need of a system that is just as agile but can handle tailor-made financial servicing? Aptic has a solution for that, too! Feel free to contact me for info.