In this five-part blog series, we identify the top four challenges working capital* finance lenders face and how software-as-a-service (SaaS) technology can help you overcome those challenges today and futureproof your business for tomorrow.
Part 4 in this series focuses on why it’s important for working capital finance lenders to adopt SaaS technology and data streaming now to set the stage for sustained growth and competitor differentiation.
*For simplicity, we generally define working capital as invoice finance and asset-based lending (ABL) finance. Invoice finance includes recourse and non-recourse factoring, invoice discounting, and shadow ledgering. Asset-based lending finance includes accounts receivable, inventory, equipment, and term-loan lending. The structure of these working capital finance lending arrangements varies regionally.
How data streaming can prepare working capital lenders for Industry 4.0
Fun fact: 90% of the world’s data in its entire history was created over the past two years.
Take a moment and let that sink in. Talk about information overload. And data is only expected to grow exponentially over the coming years.
Not-so-fun fact: Accessing meaningful and near real-time data quickly from multiple sources is one of the most common challenges working capital firms face today.
While access to vast amounts of data from many sources is a good thing, it can get overwhelming especially when attempting to figure out what to do with it. How do you best leverage and capitalize on this valuable information? The answer is data streaming – data continuously generated by different sources in near real-time.
Let’s take a step back to better understand why this influx of data is happening now. Learn how access to data with data streaming can grow your business, differentiate from your competition, and create a better experience for your customers. Additionally, this post explains how data streaming can help prepare you for what’s known as Industry 4.0.
What working capital lenders need to know about Industry 4.0
While we all know data is power, why is there a greater sense of urgency right now?
We are now living in the early stage of what is known as Industry 4.0 or the fourth wave of the industrial revolution. We’re more connected now than any other time in history. And that connectivity continues to mature rapidly.
When we think about the industrial revolution, images of innovations from previous centuries come to mind – steam power, factories, the assembly line. The fourth industrial revolution – unlike its predecessors – knows no boundaries and is evolving at an exponential rate rather than a linear pace.
One example of Industry 4.0 that we can all relate to is what the market calls IoT – or the internet of things. There’s a growing network of internet-enabled and connected devices that we use every day. Examples include mobile devices, fitness trackers, automobiles, security systems, farm machinery, etc.
Experts say the full strength of the fourth industrial wave will arrive within a generation – in less than 25 years. While that may seem far away, the secured finance industry is already warranting data insights today.
What is driving the exponential growth in data right now?
Two macro trends in technology came together at the same time: data creation and capture and cloud computing. This pairing drove the cost of big data down dramatically so that all companies of all sizes could access data more quickly.
As we emerge from the pandemic and anticipate the fourth industrial phase, the leaders in the working capital industry will be those who embrace digital transformation now and the ones who can most effectively leverage data.
Discover hidden insights with SaaS and data streaming in real time
So how can you plan for this future Industry 4.0 with data coming at you in all directions?
Accessing your data in near real-time is your most powerful tool as a working capital lender. But even more important is accessing the right data in a sea of information. You need data insights readily available and structured to cut through the noise and lift hidden insights to guide your business decisions and better serve your customers.
Another not-so-fun fact: Most working capital organizations (asset-based lenders/ABL and factors) are not ready for that explosive growth. They are not set up with the proper technology to make it happen.
While data continues to grow every single day from every direction, you can get ahead of the pace of change with the right technology.
Data streaming is the solution for working capital lenders to access data quickly. And Solifi’s SaaS technology is the perfect model to enable you to receive data in the format you need in near real-time. You’ll experience tremendous efficiency through highly evolved artificial intelligence and machine learning that processes all data and flags exceptions for staff resolution through dynamic workflow queues.
We want you to be at the forefront of all that change. And with SaaS technology, it doesn’t matter the size of your company. It’s all about the speed in an Industry 4.0 world.
“In the new world, it is not the big fish which eats the small fish. It’s the fast fish which eats the slow fish.”
– Professor Klaus Schwab; Founder and Executive Chairman, World Economic Forum
Before the pandemic, technology leaders in the working capital sector were growing twice as much as late adopters. Over the past three years, those technology leaders are growing as much as five times faster. And they are relying on SaaS technology and data streaming to help them make the right decisions faster.
SaaS-based data streaming solves common pain points for working capital lenders
Solifi data streaming provides:
- Near real-time access to data in a consistent data format (i.e., Kafka Streams – a client library for building applications)
- Data transparency
- Flexibility to access the data you require
- Ability to quickly integrate into your data warehouse for use with data visualization and analytics tools
And we provide it in a way that makes sense for you – where you can get the most value and insight. For example, last month you generated a report that fit your needs at the time. However, now you want to add three different elements. Rather than using static information, you can easily pull current information that has been streamed to your data warehouse for a real-time view of portfolio attributes.
This immediate access to your data allows you to assess, report, and react quickly. And that’s possible through data streaming from the Solifi open finance platform.
Top reasons why working capital finance lenders should care about data streaming
Why should a working capital finance lender care about data streaming? Here are a few of the top reasons why access to data insights in near real-time is important. This information can help you make smarter and more efficient decisions to manage your business today and futureproof it for decades.
- Optimize business operations by analyzing a borrower’s buying behavior and sentiment
- Identify risk that goes beyond a credit score and predict risk with access to multiple data points
- Assess a customer’s buying power
- Reduce costs by eliminating manual processes and errors
- Seamlessly transition to the next generation of emerging technology, products, and services
- Create a better experience for the connected customer
Learn more about Solifi’s open finance platform, SaaS-in-the-cloud technology, and data streaming, and how it can help you overcome your top working capital finance challenges. Discover how you can access data quickly with data streaming to make better business decisions in less time without the guesswork.
