Simplifying Reverse Factoring at Banks and Financial Institutions with Automation | NTT DATA

Thu, 27 April 2023

How supply chain automation can help banks and financial institutions optimise reverse factoring

At NTT DATA, we use tech solutions to help banks and FIs optimise their internal processes and maximise their efficiency.

One of the core tenets of digital transformation is optimisation. The question for many organisations today is how they can optimise their internal processes to reduce costs and make their operations more efficient.

There are few industries where optimisation is more pertinent than banking and financial services. Despite significant progress in digitalisation, most banks and financial institutions (FIs) are still being slowed down by manual and time-consuming internal processes. However, the key area where these processes are under particular strain is onboarding suppliers.


Optimising reverse factoring

Supply chains are notoriously complex, and invoice processes are often long and drawn out, leaving buyers unable to make timely payments to their suppliers. Subsequently, when payments are delayed, the entire supply chain is stifled. One solution to this is reverse factoring.

Reverse factoring occurs when a third-party steps in and finances a supplier on behalf of the buyer. The benefits are numerous, including increasing cash flow, reducing the likelihood of disputes, and cutting administrative work in half. It provides a huge area of opportunity for banks and FIs who can step in and play a necessary role that benefits all parties involved. However, for a third-party bank or FI to effectively provide reverse factoring services, it has to create a relationship with a supplier, which can in itself be time-consuming and costly.

The question, therefore, is how we can optimise this onboarding process. At NTT DATA, we use tech solutions to help banks and FIs optimise their internal processes and maximise their efficiency. In the case of reverse factoring, we’ve looked at automation as a tool to reduce the time and capital they need to invest to build strong and lasting relationships with suppliers.


Top tips for the optimisations of reverse factoring

We advise that banks and FIs invest in four key areas during the automation process:

  1. Tracking and reporting. Every stakeholder must clearly understand the required KPIs to reach full automation.
  2. User experience. Suppliers and buyers should be provided with a streamlined and easy experience when working with the bank or FI.
  3. Full digitalisation. The supply chain must be fully digital and omnichannel to provide customers with a complete view of the process from start to finish.
  4. End-to-end integration. All systems must be integrated to prevent siloed tasks and reduce administrative tasks.

NTT DATA recently worked with a leading multi-national bank, successfully implementing process automation across its supplier onboarding process. With this client, we improved the customer experience, enhanced the traceability of transactions across the entire supply chain, and created a single channel of communication that hugely reduced the number of person-hours required for administration.  

Automation serves a purpose at all levels of the banking and financial services industry. At NTT DATA, we utilise our entrenched expertise in cutting-edge technology to help banks and FIs maximise the value they can deliver to their corporate clients. Banking process automation is one such area where our technology solutions have helped our clients optimise their internal processes and become more efficient as a result.

This is just one example of the work NTT DATA has been doing in Supplier Onboarding Process Automation. In our latest white paper, you can find an in-depth exploration of the market trends, the challenge, the solution, and lessons learned from the experience of helping our clients optimise their onboarding processes. It serves as a comprehensive guide to automating supplier onboarding and is applicable for any organisation seeking to explore this strategy.

We highly recommend the white paper for any working in financing the supply chain or who is interested in finding out more. Click here now to read the white paper in full.

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