Segment value propositions for digital invoice management

Today, during the webinar, we discussed with Katalin Kauzli (Partner HUB) the topic of Segment value propositions for digital invoice management.

I call Katalin an ambassador of e-invoicing integrated into banking. We did an enormous number of talks on that topic. Watch my interview with Katalin, recorded in Budapest last year.

Invoice data related use cases are relevant for all customer segments.

Because e-invoicing is becoming mandatory in EU countries (and not only) during the next 2-3 years, e-invoicing and digital invoice management as a service for the customers, and also invoice data create enormous value for the bank and the customers.

Why?

Here are some examples of the use cases:

1. Business Finance Assistant: SME banking incorporating digital invoice management.
2. Integrating e-invoicing and request-to-pay to onboard corporate customers.
3. Next-generation electronic bill presentment and payment (EBPP) services for retail customers.

E-invoicing ensures the availability of structured invoice data.

Invoice data contains the widest structured data throughout the purchase-to-pay/order-to-cash process: both payments and financing can be concluded using invoice data.

The datasets generated during an economic transaction can be summarized as shown below:

If structured invoice data is available, then it can be used throughout the digital financing process, as it has all data that is necessary for invoice factoring, such as:

• Supplier and buyer data
• Invoice amount
• Payment terms
• Payment means (necessary bank account number, etc.)

Each invoice is a payment or financing opportunity. Invoice data enables process optimization and additional insights for the bank, and allows to digitalize the following processes:

• Initiate or request payment from invoice data.
• Data-based digital financing; data modeling.
• Cash-flow projections for offering financing products.

Invoice data enables a myriad of use cases in banking. Using invoice data banks can help navigate their customers with everyday spending decisions and offer savings opportunities, savings and investment alternatives, or event-based loans while making their operations and pricing more efficient and getting extra customer insight. Invoice data provides a 360 degree customer-centered view instead of “simply” executing payments.

Here are some of the possible use cases:

• Fully digital service model enabled by invoice data for SMEs (invoice factoring, invoice finance, supply chain finance).
• On-event invoice finance, with a finance offer right at the moment when the invoice is issued. With 2-3 clicks.
• Better payment experience.
• Invoice presentment integrated with payment request as a new way of payments, invoice inbox for storing digital invoices.
• Carbon footprint calculated based on actual spending patterns.
• Analysis of energy and utility bills.
• Integration using invoice data for onboarding merchants into request-to-pay for leasing or BNPL.
• Credit scoring and insurance risk models using invoice data, e.g. insurance pricing considering health-related spending.
• Automatic reconciliation of invoices and payments for SME and corporate customers using open banking APIs.
• Customized loyalty programs with merchants based on actual customer spending.
• Suggestions for consumers for savings and spending optimization.

Do you want to launch an e-invoicing solution for your SME customers? 

Here are some tips from Katalin. Before you take a final decision on whether to launch e-invoicing or not, you should decide whether SMEs are at the core of your strategy.

Do you want to:

• Become the primary bank of the customer?
• Provide an end-to-end service around financial administration/become a financial one-stop-shop for SME customers?
• Become an ecosystem orchestrator?

If the above ones are your drivers, then launching e-invoicing is a good idea for your bank.

What additional efforts do you need to think about:

• Understanding the nitty-gritty of invoicing and the principles of invoice system design.
• Definition of all invoice issuance customer journeys.
• Maintaining Invoicing compliance with the solution.

The opportunity is there for all, if you do not use it, others will.

For more details, watch the webinar recording: