Career technologists, Martin McCann and Dr. Matthias Born, are launching a world-first lending tech for banks and traditional lenders that will help to equip them against competition from tech giants such as Facebook, Tencent, and eBay wanting to enter financial services.
Trade Ledger is the world’s first business lending platform that transforms digital data from business supply chains in real time, allowing banks to assess and regularly update credit and default risk of businesses they lend to. Currently this is only done on a one-off or infrequent basis on a very small sample of invoices, and not on any other trade documents.
The platform will finally give banks more advanced network and data analysis technology than global technology companies, in a lending segment that has long suffered from a lack of technological innovation.
What gap is Trade Ledger looking to fill?
“Banks and other business lenders have never been able to accurately leverage quality operational data to determine business lending risk, as a result there is a loan undersupply to the tune of AU$60 billion each year in Australia, and AU$2.1 trillion globally,” said Martin McCann, CEO and Co-Founder of Trade Ledger.
“But as the global economy increasingly transitions towards smaller, high-growth businesses, banks have an obligation to learn how to supply working capital needed by these businesses for sustained growth. If they don’t learn to do this, it’s also only a matter of time before technology giants figure out how to resolve the problem, and swoop in.
“The challenge for banks is improving both its cost/income ratio and capital efficiencies within a segment considered higher risk, and Trade Ledger offers the first open banking platform that resolves both of these challenges.
“This represents a huge opportunity for local Australian banks and specialist business lenders to export financial services globally – so long as they jump on the opportunity to do so before oversees competitors do,” continued Martin McCann.
What is the story behind Trade Ledger?
The idea for the platform came about when the Trade Ledger co-founders realised that the increasing digitisation of business supply chains provided an opportunity to connect the business financial supply chain directly to the bank.
They also wanted to provide a way for banks’ customers to apply for funding in just a few minutes, compared to the current 30-hour average process, helping them to directly compete with more tech-savvy entrants such as fintechs and large tech companies.
“For the first time, banks and other traditional lenders will be able to use the digital information being created in supply chains to predict the exact probability of an individual invoice default at any given time,” continued Martin McCann.
“SMEs will also no longer be treated as one homogeneous, high risk group of borrowers, when differences in corporate structure, business model, cash flow need, degree of technology adoption, scalability, and a multitude of other characteristics that can change hourly all affect default and fraud risk levels significantly,” concluded Martin McCann.