5 Reasons Why Banks Profit from E-Invoicing
5 Reasons Why Banks Profit from E-Invoicing
If you are a bank considering e-invoicing, the future is looking very bright indeed. Recent publications from Billentis, Deutsche Bank and Innopay cite very impressive growth and adoption rates, thus highlighting the potential opportunity for any bank who offers the service. Banks for example are already in the enviable position of having established relationships with the strongest growth market - the SME.
So here are our top 5 statistics on the current e-invoicing market that will help explain why banks should get involved now so that they can offer stickier, more profitable services to their corporate customers;
1. 40% growth in e-invoicing transactions per annum1,2
Over the past two years, the volumes of B2B electronic invoices have been growing at a rate of approximately 40% per annum - with a further 37% increase forecast for 20105. The recession has driven the growth of e-invoicing as corporates seek to reduce costs and drive up efficiencies. Banks that provide e-invoicing as part of their transactional services are enjoying rapidly growing revenues from the impressive and stable growth in e-invoicing transactions.
2. 2,640 businesses per day are using e-invoicing for the first time in Europe
This equates to a 50% growth in the number of e-invoicing users per annum2,3. This growth has been sustained for the last couple of years - and is predicted to grow by a further 64% in 20103,5. Banks that provide e-invoicing services are retaining customers and winning new business from e-invoicing laggards.
3. 95% of the market is untapped
In 2009, only about 5% of all invoices across Europe were sent electronically. This leaves a massive market potential with consistent and healthy growth. Banks already experienced in providing e-invoicing services to their corporate customers are well placed to capture market share by default.
4. 40% of invoices involve a small company2
Small enterprises account for a significant proportion of invoices sent or received in Europe. This sector has been a difficult sector for the independent e-invoicing service providers to address as they simply do not have the capability to reach such a mass market. Banks already provide online services to most of Europe’s SME’s and are in an enviable position to easily extend their services to include e-invoicing.
5. €500Bn of unnecessary working capital
This is locked up in the financial supply chains of Europe’‘s top 1,000 corporates, due to poor visibility of payables and receivables4. E-invoicing provides transparency and enables collaboration on the progress of a business transaction between the buyer and supplier. The electronic invoicing service can feed into other finance solutions providing the corporate with tighter cash management and enabling additional value added financial services such as factoring or supplier finance. E-invoicing is enabling banks to provide their corporate customers with smarter solutions for managing their working capital and less risky instruments for financing.
This market is yours to give away…
Sources:
1. E-Invoicing/E-Billing in Europe. Feb 10. 2009. Billentis.
2. E-Invoicing Report. May 3 2010. Deutsche Bank Research.
3. E-invoicing 2010 - European market guide. May 2010. EBA & innopay
4. SWIFT e-invoicing consultation. October 2008. SWIFT.
5. E-Invoicing News 2010-1. February 2010. Billentis