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Volume 3

of our Receivables Finance Global Outlook explores how lenders can use technology to gain their competitive edge and capitalise on the emerging growth opportunities – without compromising on credit quality.


With the second year of the pandemic coming to a close, the receivables finance industry remains in limbo. As the world moves beyond the initial response to COVID and begins to reflect on the impact of the last two years, so too must the receivables finance industry. The tapering and withdrawal of government support schemes leaves lenders needing to assess the business landscape quickly and accurately.

It is already clear to many that a two-tier market is beginning to take shape. A considerable number of businesses grew through the pandemic, representing an opportunity for the receivables finance industry, as these firms look to cash flow funding to fuel further growth. Conversely, our industry is also predicting a tsunami of insolvencies, well beyond pre-pandemic levels. This is in the context of global supply chain challenges and rising costs. These conditions place unbearable pressure on not just the ‘zombie’ firms (those which are classified as unproductive, unviable, highly leveraged and who rely on government support), but also previously healthy operations. Understanding their exposure to each tier of the market represents the single biggest challenge facing lenders as we head into 2022.

This third volume of our Receivables Finance Global Outlook explores how lenders can use technology to gain their competitive edge and capitalise on the emerging growth opportunities – without compromising on credit quality.

To achieve this, we consider the value of customer journey mapping through the entire lifecycle, and how this is powered by a comprehensive range of data sources. Such projects require investment, so our report will guide you through best practice from our consultancy team on how to gain stakeholder engagement, as well as simple strategies to guarantee a successful digital transformation project.

Michael Ellis, Managing Director, EQ Riskfactor

COVID has shown us the need to be flexible and adapt. Start with what you want to achieve and then look at how can technology enable it – rather than taking an existing process and simply making it digital.

James Cooper,
Chief Technology Officer, Bibby Financial Services

Mapping digital customer journeys

As part of our latest study of receivables finance professionals across the US, UK, France, Germany and the Netherlands, we assessed automation levels during the customer onboarding process. Globally, only 20% of respondents have processes which they describe as mostly automated.

Encouragingly, there was a clear trend towards future digitisation, with well over half of respondents planning to digitise within the next two years. For many lenders, this will mean that research, budgets and investment proposals should be under consideration now.

The onboarding process, arguably more than any other stage of the customer journey, is driven by the client and their needs, wants and preferences. Therefore, as individual expectations move towards digital, so too do the preferences of businesses, meaning it is only natural to see lenders planning greater automation across their operations.

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Some clients may decide they don’t want to allow automated data extraction and you need to offer that choice to them, even though it may be inefficiency for you internally. On the other hand, in [an automated] data extraction scenario you may choose to pass on your lower cost to serve the client as an incentive to do so. At the end of the day, it’s about getting the product right for different client needs.

James Cooper,
Chief Technology Officer, Bibby Financial Services

The most valuable automation solutions, when properly embraced by lenders, will work with changing client preferences. Accounting extraction is a good example. During an assessment phase an applicant may be unwilling or unable to connect to the lender’s system; either through concerns surrounding data privacy and security, or as a result of non-compatible accounting software or overly-manual processes within their own operations.

When a prospective customer is keen to engage, misplaced automation must not be allowed to stand in the way. The lender must work to create alternative ways to engage and enable tasks such as file sync and document upload. The ability to gather responses to qualitative questions must also be factored in. The data lenders gather from prospects here can be used throughout the entire client lifecycle to enhance the customer journey and even protect the lending business from fraud. Information captured at the point of credit acceptance ensures that ongoing operational schedules and covenants are adhered to, further maintaining a positive, fruitful customer relationship.

In addition, accurate data monitoring means lenders can benchmark clients against historic performance. Ongoing monitoring throughout the client lifecycle will spot deviations from the norm, allowing for earlier corrective action. Mapping how your technology will be used through the entire client lifecycle creates value for a wider stakeholder group. It is often at a marginal extra cost. Eradicating many administrative manual processes removes the risk of human error, and allows lenders to increase the frequency of activities. Activities such as reconciliations or monitoring daily, as opposed to monthly (which currently are both delayed and dependent on client input).

What data...


Powering processes with a comprehensive data suite

Whilst the exact terminology used may differ, there is a phrase consistently used globally – bad data in, bad data out. Inaccurate data can be a major blocker to digital transformation. For example, the use of an incorrect debtor name or company number might reduce the ability to correctly calculate group exposure or identify contras. Failure to closely examine company structures might mean that blind spots of association are created or that KYC responsibilities are missed.

Obtaining a comprehensive suite of data enhances and supports the lenders’ funding processes to ensure the client gets the right product and right funding, in the right way. Furthermore, intelligent data use allows lenders to not only suit their borrower’s current requirements but also to help them map out a plan for their future needs, based on benchmark trends which can be aligned to forecasted growth/changes within that client.



01  Financial data – balance sheet information, P&L data, calculated ratios.
02  Open Banking – bank statement data/transaction level detail.
03  Debtor, creditor, and item level transactional data.
04  Credit Reference data.
05  Nominal activity and audit trail data, from entity account packages.
06  Financial health information about the company.
07  KYC data across businesses and individuals for regulatory requirements.

Data truly has the power to transform the client lender experience, and not just because it ensures the right businesses get access to the right products at the right time, but because it can accelerate the entire lending process. We live in an age of instant gratification and as consumer financial services transform with the fintech revolution, B2B lending has started to look its age.

Data can change this by supporting faster and more accurate lending decisions that facilitate a frictionless experience for the borrower, without compromising security for the lender. In fact, data can actually reduce friction for the lender too. It has the potential to considerably reduce the customer acquisition cost; as data-led automation shortens the cycle time from initial meeting and application through to onboarding.

Customers need reassurance and advice to make a confident credit decision. So, crucial to the digital transformation is how it is communicated and positioned to clients. Here, lenders have a key information-gathering opportunity to conduct a post-onboarding survey of new clients and ask them about their experience. In doing so, they can continually improve their customer interaction and product proposition.



Adding value and getting ahead

As we look to exit the pandemic and recover, lenders need to ensure they understand each client’s individual performance and trends. This will help establish proactive conversations with prospects and clients. These proactive conversations look at support for growth and recovery with working capital needs of the business; particularly following government stimulus ending. From a fraud perspective they also protect the lender’s commitment going forward.


 Sales Movement % levels

 Debt turn trends potential impact of clients’ own debtors stretching payment terms

 Cash Desperation how quickly is the client drawing down available funds after invoice submission

 Dilution/Erosions potential pre-invoicing and fresh-air concerns

B2b Woman


A smaller lender might not be able to compete with the larger players in terms of base-line cost of funds but they can in terms of data agility, assessing risk, and speed of decision-making.

Matthew Davies, UK Finance



A lender should not just look at factual historical data but be able to gain insights into the client’s true-life business scenarios – and just as importantly how they are likely to change. It could be, for example, that the client is on course for significant growth which could be missed by purely looking at historical data. Understanding the forecasted trading of the client is also a key area to be monitoring.

All these factors provide lenders with a key opportunity to secure buy-in from prospective clients. “Technology and the types of data it can unlock are key but it is not the whole story. It is crucial that lenders and their clients understand the insights and benefits that data can bring; what it means, but also what it doesn’t mean. The challenge – or more accurately, the opportunity for the IF/ABL sector is to combine these new data insights with the industry’s traditional inherent strengths in terms of understanding their clients and their businesses,” says Alex Waterman from UK Finance.

Technology, when correctly applied, has the ability to help lenders differentiate themselves in a market where competition is not just from within the receivables market, but also other forms of finance. Customers want to know how quickly they can access funding, how much they can have and what it is going to cost them. Technology completely levels the playing field.

“It can be a point of differentiation for challenger lenders – for a large institution it can take longer to put in place the systems to take advantage of new insights,” says Matthew Davies, UK Finance. “A smaller lender might not be able to compete with the larger players in terms of base-line cost of funds but they can in terms of data agility, assessing risk and speed of decision-making.”


Senior executives need the analysis to show that technology is in their best interests from a bottom-line perspective.

John De Pledge, Leumi Business Credit

Win hearts & minds to influence stakeholders

Whilst not always the highest response, the ability to gain senior stakeholder sponsorship is a consistent challenge felt in all surveyed markets. This is not unique to the Receivables Finance market, although the niche challenges and solutions do mean that materials can be harder to locate through independent research.

Whether it is an end-to-end transformation or a more focused tech adoption objective, it is likely that the technology lenders wish to embrace will have a wide range of potential purposes providing value across their business. At EQ, we’ve seen projects led by Risk, Sales, Operations, IT, Marketing, Compliance, Legal and Finance, but rarely engagements that place emphasis on more than two departments or stakeholders at a single time. This creates a considerable missed opportunity and greatly increases the project’s chance of failure.

One of the easiest ways to ensure stakeholder buy-in for new technology adoption is to bring them inside the process from the very outset, making them part of the decision-making and allowing them to feel that the solution is one they have played a part in developing.

Main obstacle preventing lenders from implementing new technology

5 Step

stakeholder engagement checklist


STEP 01 | Understand the process within your business for investment approvals, reviewing other recently approved submissions.

STEP 02 | Focus on decision criteria such as strategic initiatives, growth, compliance, and regulation or cost reduction.

STEP 03 | Create a burning platform (help colleagues see the consequences of not changing) through a critique of your business incorporating competitor analysis.

STEP 04 | Collaborate and create in-house advocates from cross-functional teams to help ‘sell’ your idea across the business.

STEP 05 | Evaluate options and present recommendations, indicative costs, timing, ROI, benefits, and challenges.

Regardless of approach, close supplier engagement is needed to consider the wider context of market trends and best practice. You need to ensure that your investment will provide benefits in the immediate term, whilst being flexible enough to be future proof. 

When an organisation considers building – against buying – they often realise challenges in the medium term. Internal resourcing and investment cases can underestimate the cost of continuous improvement, support and maintenance. Consequently, this can present a barrier to realising ongoing value.

The key differentiator

between the lenders that will do this and the ones that won’t, is the willingness to embrace and invest in technology


Closing remarks

To close out this report we want to remind lenders that, whilst the next 12 months will not be without challenges, it will predominantly be a time of considerable opportunity. With government support schemes drawing to a close, the window is there for receivables finance lenders to step forwards, seize the initiative, support the economy, and strengthen their own books all at once.

The key differentiator between the lenders that will do this and the ones that won’t, is the willingness to embrace and invest in technology. Particularly, those that invest in technologies that allow for the better management and interpretation of data.

However, our own experience in the market, which has been further borne out in our proprietary research and discussions with other industry leaders, tells us that investment in technology often faces considerable obstacles. Many well-intended projects simply fail to get off the ground because they do not secure the necessary buy-in from key internal stakeholders. It is our hope that this report not only advocates the case for technology, but also sets out a clear and actionable plan for securing technology investment within your own lending business.

As always, we would like to thank our external contributors for their insights which add an invaluable context to our own research and findings:

Matthew Davies, Head of Asset-based Lending of UK trade body, UK Finance
Alex Waterman, Principal, Invoice Finance & Asset Based Lending, UK Finance
John De Pledge, Head of Asset-based Lending, Leumi Business Credit
James Cooper, Chief Technology Officer, Bibby Financial Services

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