Financial Services Factoring and Leasing

Market Dynamics

Over the last two decades, the Financial Services industry has undergone a significant transformation due to changes in the competitive environment, technology and customer dynamics, alongside growing financial management constraints. In today’s fast-paced business environment, conditions and opportunities change rapidly, so companies need quicker and more specialised, agile and flexible funding solutions if compared to traditional credit lines.

Financial Institutions understand that liquidity is paramount for small and medium enterprise (SMEs) sustainability and that large companies need cash flow to diversify their businesses without increasing debt. That is why they provide Factoring, Reverse Factoring (Payables Finance) and Leasing to facilitate fund channelling and to increase capital formation in an agile and timely manner. For their customers, this leads to the recovery of financial leverage, ensuring cash flow to apply to their businesses.

Both solutions allow companies relatively quick and easy access to working capital. However, due to particular processual features, Factoring and Leasing are generally managed in unrelated platforms by distinct professionals, hindering their providers from optimising human, financial and technological assets.

Managing Factoring and Leasing solutions within the same platform allows Financial Institutions to lower Total Cost Ownership (TCO) and take advantage of economies of scale based on supply chain simplification. It also improves people’s business and technological skills due to shared software, resources and teams.

What do Financial Institutions Have to Gain?

Factoring is a more complex solution when compared to traditional loans or credit lines, mostly due to its various features and the effort applied to the collection processes. Bearing this in mind, Financial Institutions focus on raising efficiency to make the business sustainable from an operational point of view by optimising human effort on redundant and repetitive tasks and improving user-friendliness.

While being unavoidable, the risk of default by debtors, or even bankruptcy, must be visible and understandable to ensure transparency. Factoring and Leasing institutions must, therefore, have access to increased control through a supporting solution that provides a complete overview of operational lifecycles.

Using Analytics simplifies reporting, planning, and forecasting activities through self-service dashboards which support the entire organisation. Whenever the finance team receives a request for data, they no longer need to spend hours collecting and ensuring data quality. With automated processes, data quality is guaranteed and easily shared with other strategical departments.

Finally, to strive in the digital era, Financial Institutions are being pushed to rethink business models and solutions. This poses challenges to having the ability and flexibility to integrate Factoring and Leasing innovative solutions with legacy IT stack and rigid banking core systems.

The solution makes operations more efficient while improving debt recovery for all types of Factoring, including international, recourse and non-recourse, invoice discounting, confidential, spot and whole turnover. It also includes a module of Reverse Factoring, or Payables Finance, with smart tools for tracking and checking invoices to ensure greater control, with or without payment assurance.

For Leasing, the solution suite supports vehicle, equipment, and real estate finance, and manages the entire lifecycle – from quotation to contract –allowing contractual changes and early terminations.

Cornerstones of the solution:

• Seamless Integration: seamlessly integration with banking core systems, avoiding duplicating information from Financial Institutions’ databases by not acting as a standalone;
• Automation: applied to repetitive processes, such as file transfers, invoice processing, and receipt tracking;
• Usability: intuitive interfaces enabling users to look for client or contract information and extract or export it from data sources. The portal navigation is facilitated by contextual search and by language or settings switch for commissions, interests, alerts and communications.

Considering the functional architecture of Celfocus Factoring and Leasing, the two specialised business finance solutions sit atop the banking core system and can access the accounts, user management and transactions applications, among others, by key, through web services or files, without replicating this information.

Celfocus Factoring and Leasing caters to Financial Institutions with multiple clients, business sectors, languages and currencies. This allows companies to easily set up new business units and markets without additional software expense.

• Single business suite for Factoring and Leasing;
• Flexibility;
• Increased control;
• Higher efficiency;
• People-centric approach;
• Quick and interactive reporting;
• Higher performance;
• Business growth.