Demica has unveiled a new portal for its trade receivables finance platform that will allow banks to access its transaction management tools and set up deals directly – functions that were previously only available through Demica’s internal systems.
The platform, which Demica first launched in 2002, offers banks a way to automate their trade receivables programmes. Corporate clients can share their unpaid invoices via the platform, which then helps banks assess which are eligible for financing and fit a bank’s specific exposure limits.
Currently, the process requires Demica to manage the onboarding of corporates seeking financing and to upload the risk criteria of banks looking to offer clients early payment on invoices.
As of the end of Q3, banks can get a login for the platform that will allow them to set up their own transactions with corporates through new, streamlined dashboards and upload term sheets directly. The platform will then automate the bank’s finance programme and generate related reports and payment messages.
Banks will also be able to ‘white label’ the portal by incorporating it into their own systems and add their own branding to provide a more personalised user experience for users.
Demica says that by removing itself from the transaction it will allow banks to increase the volume of deals completed on the platform. It currently boasts US$9bn of assets under administration for its receivables pool, with between three million and four million invoices financed each day. Demica predicts this will grow significantly once the portal is live.
Moreover, the new online dashboards will enable corporate treasurers and internal bank users to view real time performance of a receivables finance transaction and underlying portfolio data down to an invoice level.
Demica says this enhanced reporting capability will help banks meet the European Securities and Markets Authority’s regulatory requirements for banks on securitisation reporting, which requires an invoice-level breakdown of transactions. By being compliant, banks will receive significantly lower regulatory capital treatment.
The new functionality was demoed to 15 banks at the Global ABS conference in Barcelona in June. Matt Wreford, Demica CEO, tells GTR that he believes that all of those banks will use the new portal to upload financing programmes directly on a deal-by-deal basis, while he expects five to seven banks will eventually white label it over the next few years.
Demica says the new portal is currently being piloted by one unnamed bank and refined by its own development teams.
Existing users of Demica’s trade receivables platform include HSBC and JP Morgan.