Real-time data use cases for B2B fintech


#1

Hi,

First off, great forum here, very much enjoying the thought provoking topics and contributions. Thanks to @BernardLunn @Efi and others.

I’d like to hear the community’s thoughts on real-time data and where it could add value in B2B scenarios.

We’re getting interest from supply chain finance providers and P2P lenders who are asking for alternative live data to enhance (typically) historical credit data, but I’m sure there are lots more applications outside of working capital / lending.

In brief the data categories we currently work with: company data and financial environment; events data such as legal cases, weather; news, social and sentiment; and - where we can connect to end users accounting / ERP - in-house transaction data.


#2

@riskopy_mike That is a big subject need to get into real use cases to have a real convo. As systems move real tiime, the equivalent of market data feeds will be needed in many markets. Blockchain networks need external data “oracles”. I know Supply Chain Finance - can you explain use case there. Looping in @howard.tolman who knows other markets where real time data is used for risk management.


#3

You cannot separate B2B fintech from B2B tradetech and both require behavioral modeling and analysis. This is what we try to do at the ORIGIN project and involves an advanced system of stochastic differential equations and a real knowledge base of transaction relations (AI) which is based on pattern recognition and fuzzy logic tools to specify parameters.


#4

@BernardLunn you are right about the need for oracles in smart contract applications. This will be growing in importance.

While Supply Chain is not something I am well versed in. As for how data with real-timeness can effect Supply Chain look at Fractal Payments and consider the potential to do away with the 30/60/90 Net financing methods.

Each link in the supply chain could involve a fractal payment to it’s suppliers. Consider a stacking fractal payment arrangements vertically across the supply chain.

So not only is a single payment from the ultimate end consumer to a retailer, broken up in real time and sent to various wholesale & distribution parties, but when a portion of that original payment is received by the wholesaler it could trigger a second round of fractal payments to the suppliers & manufacturers… then a third round of fractal payments to raw material producers etc. all in near real time.

In such an arrangement one could map out a complex view of the supply network instead of just having just liner view of a supply chain.

All this real time data & payments can be plugged into ERP systems and who knows what could be automatable in the future?


#5

Thanks everyone for chiming in

@BernardLunn Left the field open to see what ideas may percolate. Agree the transition from batch > flow will impact across the board. Here’s an idea from SCF/receivables

  • Dynamic discounting that is triggered by - and structured in light of - events after the original invoice is issued. An example is a currency fluctuation which could net both parties a better outcome.

@takiecon. Yes agree on the B2B fin/trad tech is really the same thing. Aren’t trade networks really just finance networks. Can you post a link the ORIGIN project you mention, l’d like to learn more but couldn’t find anything?

@KarmaCoverage. Fractal payments. I was working on something like this as a thought experiment, looks like I’m late to the party! More credit is extended between businesses n the form of trade credit than to businesses from all commercial lenders, globally perhaps $10trillion pa. It’s unstructured and, as most businesses are not banks, on the whole, poorly risk-managed; SME’s generally getting the worse deal. Think of the benefits if you could liberate say 10% of the cash locked up in DSO, WITHOUT having to finance it?


#6

Thanks @KarmaCoverage, Fractal Payments looks very interesting. It seems to date from 2008, an eon ago in tech land. Has anybody built a commercial offering that uses these principles?

BTW, it would be better if you showed your personal profile. Our mission here is to bring the art of conversation into the digital age and it just but it seems odd to refer to you as Karma or Mr. Coverage! Of course it is no problem to show the affiliation with your company on your profile.


#7

@riskopy_mike I like the idea of event-driven dynamic discounting. That is the way a human thinks as in “wait, this no longer makes sense because x just happened”. Usually the event does not invalidate the deal it just means the terms have to change.


#8

Mike, We have removed our link for now as we are in stealth and reworking our communications tasks. However, if you leave your email I will send you some material. What do you do? Dynamic discounting depends on the forward relations of the buyer and seller and the impact of non-performance on them.

KarmaCoverage, and Bernardt fractal payments in a project cycle (supply chain is an erroneous concept and unidirectional, static and non-stochastic) is dependent on transaction agreement synapse with installation and settlement terms and multiple means of payment that could involve barter exchange among cycle participants and they are value added in the geometric/stochastic series they engage.


#9

@takiecon it is better to use @name of member when referrring to them; that way they get notified that a member refered to them.


#10

Thanks. I use names for a personal touch but you are right about the notification.


#11

@takiecon send to mike@riskopy.com thanks.

And what do we do? Take a look at http://www.riskopy.com/ to see what we’re up to.

In a nutshell we provide live data tracking on 110 million businesses for risk/opportunity events. FI’s can incorporate our API to innovate, price better or simply react quicker. We combine conventional and alternative datasets in a framework with a bit of AI/ML.


#12

Obviously hedge funds use real-time data, particularly market data and news data. However, they are increasingly using other sources of data (dubbed “alternative data”) in their investment process, and in select cases with select funds, are using alternative data in real-time.


#13

@jordanhauer4 took a look at your site - great stuff. I’d be interested in continuing a conversation as I too am addicted to exploring data for value! Feel free to ping me on mike@riskopy.com to trade some ideas


#14

Credit insurance: use live data to inform a real-time credit assessment tracking an outstanding liability. The price paid is for the cover is either i) where the policy elapses unclaimed and is the average of prices for the period or ii) where the policy is called, the price at that moment. Sort of SVR vs fixed rate.


#15

It may be off topic, but would be interested in your take on what Factom is doing in Blockchain space as the data layer:

https://www.factom.com


#16

@riskopy_mike Just saw Riskopy acquired by Coupa - yes late to the news - congrats!