Data is more important for a business than you might think – mismanagement of data or faulty security measures can cause delays, issues, and even financial losses.
Misuse of large amounts of data as well as long waiting times for money transactions became a sore problem in recent years. These issues are especially painful for small and medium-sized businesses (SMEs). But thanks to increasing digitization every cybersecurity-related problem is now seen better than ever.
Today’s Cybernews guest Giulio Rossi, Co-founder & Head of Analytics and Onboarding at Previse, has a strong opinion about technology implementation in business management and agreed to share his knowledge and observations with us.
What has your journey been like since your launch? How did the idea of Previse originate?
We recognized that slow payments are damaging businesses everywhere, particularly small and medium-sized businesses (SMEs), and it was clear that current solutions weren’t working. We made it our mission to ensure that every supplier in the world can be paid instantly. We exist to unleash the power of data for B2B commerce. We believe in a world where business data makes commerce efficient and fair for all.
B2B payments and finance are archaic. Suppliers send invoices and wait and chase for months to get paid. SMEs struggle to access traditional finance, a situation that has been exacerbated since the pandemic. This is a huge, global, macro-economic inefficiency. And in this day and age, there is a better way. Previse was founded in 2016 by a small group of people who believe that business can be done much better. We believe that technology can change this and that the answer is in the data.
We realized the solution to the problem of $125trn of late B2B payments lay in the huge amounts of historical data sitting in large buyers’ ERP systems which nobody was looking at. By applying machine learning to mine this data, we knew we would be able to predict the very few invoices unlikely to get paid so that the rest could be paid instantly.
Can you introduce us to what you do? What technology do you use to make payments easier?
Previse analyses vast amounts of business trading data to deliver radically improved finance to the world’s SMEs.
We are an enabler for existing B2B networks. Products enabled by our infrastructure include flexible cash advances that are driven by business needs and automated day-1 payments that are not dependent on a Buyer’s approval process.
What are some of the worst mistakes companies make when handling large amounts of data?
Not learning from their mistakes is the most common opportunity that we see that companies miss. We often end up suggesting process improvements and spotting potential risks or inefficiencies by just analyzing and reviewing data. Companies often do not look at all the data they have beyond what they use for reporting. Often the data that they use is to perform simple tasks, leaving a wealth of untapped information that they are not making the most of.
The second most common mistake is that data often grows with systems, and at different points in time only covers specific areas of the business. There are few resources dedicated to combining different data sources to have a holistic view of the main performance and risks. Resources are generally spent focusing on short-term business requirements instead.
Thirdly, the majority of traditional corporate policies require that data be handled on-premise by internal staff with a lack of trust in cloud services and innovative tools. Third parties can provide skills that are often lacking internally, however by refusing to use external resources, chances are companies are not getting the full benefit from their data. There is a huge amount of data mining capability available in the market today and often companies are spending more on internal resources to achieve sub-optimal results.
How did the recent global events affect your field of work? Were there any new challenges you had to adapt to?
Embedded finance has emerged as one of the most talked-about fintech “buzz words” over the past couple of years.
The pandemic accelerated the rise of embedded finance, which has created a heightened demand for alternative finance solutions. For example, the shift towards e-commerce services initiated by the closure of shops and retailers during lockdowns has led customers to seek simple, direct, and embedded experiences.
Technology providers have become more creative with their product propositions to meet this demand, leading to the rollout of an increasingly diverse range of embedded finance services. This demand has paved the way for a new frictionless and interconnected financial infrastructure era.
Besides quality financial solutions, what other technologies do you think would greatly enhance business operations?
Historically there has been more budget invested in front-end, sales, stock, and ERP technologies with great improvements made in these areas. Manufacturing and retail have also invested in back-end systems which they heavily rely on to ensure supplier performances.
However, for other industries such as services and healthcare, there are still some gaps in these areas. More investment in connectivity and transparency would change how they strategically engage with suppliers and improve execution, lower costs and deliver better services to their customers.
In your opinion, why do certain companies hesitate to implement new and innovative solutions, despite all the technological advancements available nowadays?
There are multiple reasons companies reject innovative technologies to stick with the status quo. Dependency on legacy systems and the lack of drive or ability to manage change internally can contribute to rejecting innovation. Outdated policies also play a big part. If controls and policies have not progressed at the same speed that technology has then it can seem like too big a mountain to climb when you look to update your tech stack.
At an individual level, budget owners can fear change due to potential implications on their own careers if things do not go to plan. Rather than looking at the value that could be delivered to the company, they may look for the safest option. There is that old saying that no one ever was fired for going with the status quo.
The day-to-day running of the business may also contribute to taking the focus away from wider innovation.
Lastly, the cost of change or migration, whether this is real or perceived, can burn through a lot of time and resources. Nevertheless, over the last decade, a lot of progress has been made in how new technologies can be deployed.
What kind of threats do you think organizations should be prepared to tackle in the next few years?
Innovative technology and new sources of data will be more cloud-based and developed at a higher pace. Acquiring the knowledge to master these developments and changes in data practices will be an advantage and lead to benefits over their competition. Being driven by opportunities rather than fearing change will be key.
Another factor that needs to be considered is the need to employ talented individuals that are able to operate within changing environments. There seems to be a growing desire to have the start-up culture flow through to larger organizations, however, management needs to be able to handle the challenges that come with this. The flexibility in working, along with increased transparency and constant questioning could become a drain on resources and too big a change in culture if it is not managed correctly. The need for flexible and adaptable employees covers the whole spectrum from senior management right through to the new interns.
How do you think the financial sector is going to evolve in the near future?
If anything, the turmoil of the past year has highlighted the glaring need to move away from pre-pandemic infrastructure and embrace technology as the UK builds more efficient trading practices.
The UK government in particular is fortunate to have a world-leading fintech industry here, and the public is only just starting to become aware of it. We have the world’s best finance and deep technology expertise, built on nearly a millennium of scientific research. This is a world-leading industry, driving jobs and growth for the UK.
To build an environment conducive to growth, the British government should take stock and work in partnership with the industry to explore how fintech innovation can be further harnessed. Utilizing fintech to tackle long-term pain points that SMEs face – such as late payments and difficulty accessing finance – will be key to the prosperity of the UK’s business community.
Tell us, what’s next for Previse?
We are focusing on making our platform available to as many businesses as possible through an embedded finance approach. Our software embeds into the large existing networks that power B2B commerce so that it becomes ubiquitously available. We call this the “pay me now” button and we want to make it available to every seller in the world.
Earlier this year, for example, we collaborated with Mastercard to integrate our machine learning into Mastercard Track Instant Pay - the first virtual card solution that can safely and intelligently authorize an immediate payment to a supplier once they submit an invoice.
As our journey continues, it has become apparent that we need to do more to help businesses than simply speeding up invoice payments. So we are taking another step, using our instant payment technology to make future revenue available as a cash advance today. Lots of exciting stuff on the horizon – watch this space!