Staying ahead of the curve: why only 10% of banks are using e-invoicing
Banks, Electronic invoicing, OB10
A recent report published by Celent, a consulting firm focused on the application of information technology in the global financial services industry, found that despite widespread recognition of the advantages of e-invoicing, still only 10% of the banking industry have implemented the technology.
I recently spoke to Muhammad Ayub, Head of Process Integration at Barclays, who has overseen the implementation and maintenance of e-invoicing in the business using OB10. I asked him why he thought Barclays were ahead of the curve, and what might be stopping other banks from jumping on the bandwagon.
He pointed out investment retail banking have historically treated ‘back office’ administration differently. For the former, he agreed with the Celent report in that the long term nature of e-invoicing projects sits contrary to the large but short term financial returns that drive the investment banking business case. “It’s seen as an administrative, back office function. There’s no point in upsetting suppliers”.
The report also claimed that e-invoicing is also widely misunderstood and compared to e-billing or supply chain financing. Muhammad agreed to some extent, saying that the banks perceive such technologies as competition to their own financial solutions. “If we were using someone else’s solution, clients would ask why we weren’t using our own”.
So why has Barclays chosen to invest in e-invoicing?
“Basically I don’t think the [banking] industry has moved at the same pace as our customers. Many are still running decentralised operations”, he explained. “Barclays are on that journey to centralisation, which makes the argument in favour of e-invoicing and other automaton solutions stronger. It has to be part of a long-term, broader campaign”.
While Muhammad admitted that there was still a long way to go, their investment has already reaped some rewards: they now have 50% supplier invoice compliance and are hitting a 90% payment on time rate. In turn, this has positively affected the culture across finance.
The key, Muhammad says, is gaining internal support and commitment. This may take months or years, “but now we’ve got the broad framework in place, we can move forward as a business onto bigger and better projects”.