Everything under control: master data management, automated factoring applications, risk and limit management, KYC and compliance as well as dunning and debt collection.
Master data management
A major challenge for factoring businesses emerges from the management of the debitor master data. The quality of the master data that is supplied by the factoring customer generally varies. This typically results in the following demands in day-to-day business:
The master data sets for the debitors are incomplete, for example the correct legal form of the company or the house number are missing
The spelling of the names of companies or private individuals does not always match the spelling from reference data (e.g. information agency data or public register data)
The identification of new debitors and determining whether they really exist is not possible without further measures
The recognition of duplicates in the master data supplied by different factoring customers is not easily possible
The identification of the debitors is a necessary step before purchasing claims in order to avoid fraud or simply to avoid "doubled" limits for the same debitor. Furthermore, identification forms the basis for creditworthiness checks because relevant information and possibly commercial credit insurance can only be obtained for debitors that can be clearly identified.
CAM Financial Services supports you with intelligent and automated processes for cleaning up and consolidating the master data and also improves the data by adding additional external information.
How does it work? Please check our success factors.
Automated factoring applications
The situation: many applications need to be decided on quickly by only a few employees. The IT support involved needs to function without interruptions and your customers should receive an answer to their inquiry within just a few seconds.
The automated factoring application enables fast decisions on purchase limits i.e. on the purchase of receivables from your factoring customers. For this purpose, for example, your customer uploads his invoices into an online portal or one of your employees enters an inquiry into the portal directly. In the background an automated decision-making process runs, which decides individually on the information to be utilized. We set up your individual rules for this decision-making process in advance. Taking into account all relevant information and decision-making criteria, the result is then communicated via the online portal, quickly and reliably.
Flexibility through simple adaptation and extendability of the decision-making processes
Fast automatic decisions with a usual duration (depending on the information products) of between one and ten seconds
Increased customer loyalty and satisfaction through immediate decisions
Relief from routine activities
Scalability of the business through fast decisions
Risk- and Limit management
The establishment of effective risk and limit management is essential for factoring service providers. To minimize the risk of default on claims in a purchased portfolio the creditworthiness of the debitors must be ascertained before the purchase and continually monitored in day-to-day business. The following challenges in business operations result from this:
Fast determination of the creditworthiness of debitors and factoring customers
Prompt detection of payment difficulties on the part of the debitor
Efficient integration of all the relevant stakeholders in order to carry out increases in the overall limit quickly
Operative processing of the CCI contracts and the resulting considerable workload (e.g. through fulfilment of obligations)
CAM Financial Services supports you in risk and limit management for debitors and in the allocation to your factoring customers with automatic credit assessment and limit control processes. CAM Financial Services has a large number of standard interfaces to international credit agencies and trade credit insurers for this purpose. CAM can also manage and operate the trade credit insurance of factoring customers - a clear benefit in your daily work. All this is tailored to your specific requirements in individual workflows.
How does this work? Please check our success factors.
KYC and Compliance
For factoring service providers there are specific regulatory standards in the areas of KYC and compliance. In addition to these regulatory necessities, company-internal compliance guidelines must also be observed. This results in the following requirements:
Determination of the identity of the contractual partner (factoring customer) before conclusion of the contract
Determination of the financial beneficiaries
Comparison of person and company data with external lists (PEP, AML, CFT)
Comparison of person and company data with internal blocklists
Failure to comply with the legal requirements may result in considerable monetary and non-monetary "naming and shaming" sanctions. But the fulfilment of these legal requirements involves a lot of manual checking. You need to compare the person and company data of your contractual partners with diverse PEP and sanctions lists.
The performance of these checks and the results must also be documented and retained for auditing purposes. In addition to the initial checks, continual KYC monitoring of the contractual partner is necessary.
CAM Financial Services supports you in fulfilling the KYC and compliance requirements with automatic checking processes.
On the basis of external information, the financial beneficiaries are determined automatically and comparisons with lists are carried out. In addition, the KYC risk is determined for each contractual partner. All the checks are documented by the system and historical data is retained for audits.
Find out more about our KYC solutions from our success factors.
Dunning procedures and debt collection
Even with the best checking of risks, it might happen that a factoring business buys "bad" receivables. This is all part of the business and must be countered by implementing an effective dunning and debt collection system. The following challenges result from this for the factoring company:
Identification and performance of suitable measures for each debitor
Assignment of undisputed claims to a debt collection agency
Taking into account country-specific requirements
Evaluation of the dunning and debt collection measures carried out
High manual input and high costs for operative handling, which increase with the number of debitors
CAM Financial Services supports you with dunning and debt collection processes. The system automatically selects the most suitable measure for each debitor on the basis of the available information and then records the performance of the measure by noting the progress of the process and storing documents. Payment reminders are generated automatically and are personalized. In addition, standard interfaces to leading debt collection agencies set up automatic handing over of cases.
Learn more about our solutions for dunning procedures and debt collection from our success factors.