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…
3 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
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.
4 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
How can a bank make money from e-invoicing
5 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
… some background information
6 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
7 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
8 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
9 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
10 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
11 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Creating value
12 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Trade enablement
13 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Trade settlement
14 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
15 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
In the old days…
16 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
17 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Today…
18 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Information era
- Any information
- Any digital format
- Any moment
19 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Networked economy
20 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Challenges…
Privacy issues
New business models
Realtime
21 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
How does this
Impact
traditional invoicing?
22 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Short introduction into e-invoicing
23 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
What is e-invoicing?
Electronic exchange of transaction data
Human vs machine readable
VAT Compliant
Related to other trade documents
24 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
400+ service providers
(…in different models)
25 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Solutions from service providers
• From simple email invoices
• To highly complex XML B2B integrations
• and..
• From fully outsourced processes
• To just selling software
26 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
27 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
28 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
29 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
30 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Key market players
31 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
There are different models for service providers
Supplier Buyer
Service
Provider
Trade
Service
Provider
32 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Pre-dominantly in 3-party model
33 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
More and more 4-party
34 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
4-party models are evolving
Supplier Buyer
Service
Provider
Trade
Service
Provider
35 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Very similar to correspondent banking
36 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
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
37 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
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%
38 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
SME market has 30% of volume but is under-addressed
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%
Under-addressed segment
EDI /
Trade platforms /
Supplier portals E-mail
Supplier
portals
Online
banking
portal
(web)EDI
Trade
Platforms
Buyer
portals
39 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
Adoption happens mainly in the Corporate and consumer segments
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%
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%
40 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
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
41 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
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
42 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
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
43 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
E-invoice E-invoicing E-trade
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)
44 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
With significant revenue potential
E-invoice E-invoicing E-trade
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
45 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.
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