Banks missing out on huge potential of electronic invoicing
According to a report by Celent, the potential of e-invoicing has been long recognised by banks and volumes of electronic invoices have increased, doubling in the last three years, yet the level of penetration is still below 10% in most countries.
The report by the research and advisory firm entitled, "Navigating the E-Invoicing Service Providers," suggests that banks are failing to see e-invoicing as viable service to offer. Banks are driven by business cases that require return on investment in very short timeframes, something e-invoicing is unlikely to offer. Furthermore, the number of service providers already in the market is leading banks to believe that there is little point in them spending the money to replicate the services already available.
Gareth Lodge, Senior Analyst with Celent’s Banking Group and author of the report, said “Most banks would struggle to name more than five e-invoicing providers, so it comes as a shock to some that there are over 700 in the marketplace. Many of these players have already built the functionality required, so why would a bank spend money replicating this? The trick will be how to harness investments that have already been made by others.”
Banks have looked at e-invoicing, and some have made acquisitions as a result. However, there are concerns with this approach such as how does a bank decide the best solution to acquire? Worries also surround the cost of acquisition and the fact that recent high-profile, multi-billion dollar acquisitions could price the banks out of the market.
According to Celent, the best route for banks to take could be partnering with already established e-invoicing service providers. Or, in an ideal situation, partner with multiple service providers as one is unlikely to offer sufficient solutions.