innopay on -einvoicing opportunities for banks

tomorrow’s transactions today

Opportunities for banks

E-invoicing

2 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.

Tonnis de Boer • Groningen, The Netherlands, 1973

• Studied Technology Management in NL and UK

• Background in ERP/business software industry

• Business Unit Manager at Exact Software

• Senior Management & Technology Consultant

• Expert in business processes, enterprise software and electronic transactions

• Advise companies to develop new online payments & e-invoicing product, and ring them to market.

• Love to combine business, people and technology

• Only just begun…


1. Structure & understand™

• Help professionals to understand the transaction industry

• Facilitate focus on industry level

• Research and knowledge sharing on key industry topics

2. Develop & manage™

• Help providers to develop compelling transaction services

• Develop features, (new) business and/or services

• In multi-stakeholder process or for individual client

3. Choose & use™

• Help companies in choosing and using transaction services

• Select services that fit specific business needs of companies

• Manage implementation to deliver anticipated results

Innoay value propositions for everyone.


How can a bank make money from e-invoicing


… some background information


Creating value


Trade enablement


Trade settlement


In the old days…


Today…


Information era

- Any information

- Any digital format

- Any moment


Networked economy


Challenges…

Privacy issues

New business models

Realtime


How does this

Impact

traditional invoicing?


Short introduction into e-invoicing


What is e-invoicing?

Electronic exchange of transaction data

Human vs machine readable

VAT Compliant

Related to other trade documents


400+ service providers

(…in different models)


Solutions from service providers

• From simple email invoices

• To highly complex XML B2B integrations

• and..

• From fully outsourced processes

• To just selling software


Key market players


There are different models for service providers

Supplier Buyer

Service

Provider

Trade

Service

Provider


Pre-dominantly in 3-party model


More and more 4-party


4-party models are evolving

Supplier Buyer

Service

Provider

Trade

Service

Provider


Very similar to correspondent banking


There is a growing need for 4-party models

1.Service providers are running out of runway

2.Trading parties choose their own service provider

3.Cross border trade


Corporate market have high volumes and is relatively ‘easy’ to serve

To (receiver)

Corporate Medium Small Consumer TOTAL

Fro

m (s

en

der)

Corporate 12% 2% 3% 43% 60%

Medium 7% 10% 1% 5% 23%

Small 0% 8% 8% 2% 18%

TOTAL 19% 20% 12% 50%


SME market has 30% of volume but is under-addressed

To (receiver)


Fro

m (s

en

der)

Corporate 12% 2% 3% 43% 60%

Medium 7% 10% 1% 5% 23%

Small 0% 8% 8% 2% 18%

TOTAL 19% 20% 12% 50%

Under-addressed segment

EDI /

Trade platforms /

Supplier portals E-mail

Supplier

portals

Online

banking

portal

(web)EDI

Trade

Platforms

Buyer

portals


Adoption happens mainly in the Corporate and consumer segments

To (receiver)


Fro

m (s

en

der)

Corporate 12% 2% 3% 43% 60%

Medium 7% 10% 1% 5% 23%

Small 0% 8% 8% 2% 18%

TOTAL 19% 20% 12% 50%

Under-addressed segment

EDI /

Trade platforms /

Supplier portals E-mail

Supplier

portals

Online

banking

portal

(web)EDI

Trade

Platforms

Buyer

portals

1% 5% (biller

portals)

<1%


For e-invoicing in general the SME “tail” is a key opportunity for banks

# in

vo

ices p

er

trad

ing

en

tity

# trading entities

SME market

Co

rpo

rate

ED

I

‘the tail’

Source: Swedbank


E-invoice E-invoicing E-trade

Higher level of integration: more benefits

Level of integration

Pote

ntial benefits

Opportunity to leverage structured information Unstr.

information


Key drivers

• Trade information is increasingly available electronically & real-time

• E-invoicing is already happening

• Multiple networks, many providers, different models

• Under addressed segments

• Benefits for trading party potential depends on the level of automation



Various value propositions for banks…

Level of integration

Po

ten

tia

l b

en

efi

ts

Opportunity to leverage structured information Unstr.

information

Secure

exchange

Archiving Payment

Initiation

Automated

Payments

STP

processing of

invoice

Dynamic

discounting

Financing (such as

reversed factoring)


With significant revenue potential


Pote

ntial benefits

Secure

exchange

Archiving

E-banking

Payment

Initiation

E-banking

Automate

d

Payments

STP processing

of invoice

Dynamic discounting

Financing (such as

reversed factoring)

Net benefit

25 and 65 EUR / cycle

Net benefit

5.5 and 8.5 EUR / cycle

Net benefit

1.5 and 4 EUR / cycle


Why are banks so well positioned to enter this market?

• History of managing 4-party networks in payments and trade finance

• Access to millions of SME’s via online banking environment

• Already have existing channels for the secure exchange of documents

• Are very well positioned to offer payments, financing and dynamic discounting services alongside the invoice

• Have a long track record in the electronic exchange of business messages

tomorrow’s transactions today

Thank you

Tonnis de Boer, [email protected]

For your attention