The potential for e-invoicing has long been recognised by
the banking industry. Even though volumes are steadily increasing,
doubling in the last three years, the level of penetration is still
below 10% in most countries. This report addresses how an industry
promoting electronic payment types can use e-invoicing to make the leap
into the 21st century of client servicing.
In a new report, The Opportunity for E-Invoicing,
Celent looks at the reasons why e-invoicing has failed to gain traction
in the banking industry. Much of the shortfall in effort and ensuing
success lies in the fact that banks are being driven by business cases
that require returns on investments in short timeframes. While
e-invoicing can enable many opportunities, it is unlikely to satisfy
those business requirements in the short term. Part of the problem that
is that e-invoicing is widely misunderstood and often finds itself
compared to areas such as supply chain finance, the financial supply
chain, or e-billing. This report aims to define what e-invoicing is (and
isn't), why it lies at the heart of many of these areas, and why Celent
believes }tage-invoicing could unlock many other benefits.
The US Department of Defense estimates that, by adopting e-invoicing,
it has saved in excess of US$250 million per annum. The European
Commission has estimated that the savings over a six-year period would
be the equivalent of 1% of Europe's GDP. The challenge for many banks is
that, at first glance, these are savings for corporations and society,
and not necessarily banks.
However, Celent believes that banks will ultimately benefit from these
savings, and probably more than any other sector. But even more
importantly, e-invoicing builds the platform for the digital client
relationships of the future. By starting with the invoice, "queen" of
all the documents that accompany a transaction, banks are enabling
greater efficiencies in a vital part of the value chain. That, in turn,
will lead to new insights, from opportunities for trade finance to
greater insight into their customers. But it also enables other
initiatives, from greater adoption of electronic payments (and therefore
greater straight-through processing), to a natural progression to
electronic bank account management (eBAM) for all clients.
"E-invoicing is a necessary part of an evolution in client interaction.
The business case is slim unless it has been mandated by regulation, as
it has in a number of countries such as Brazil," says Gareth Lodge,
Senior Analyst with Celent's Banking Group and author of the report.
"But the value that e-invoicing unlocks will be more than the initial
investments. Banks need to work together now, before they find that the
ecosystem has evolved without a role for them.