The banks have known about the e-invoicing opportunity for years. More than one global bank was seriously investigating the concept as a means of generating transaction revenue before the turn of the century. Why is it then that over 10 years later do we still have no bank-led e-invoice offering and why have the banks elected to ignore what is a potentially serious threat to their core business?
I asked this question to Charles Bryant, senior adviser to the Euro Banking Association. He was speaking at e-invoicing 2011 in London and he has deep and current insights to the way the banks think on this issue. He thinks there are three reasons why they have largely ignored e-invoicing. Firstly, poor adoption of e-invoicing in the market place. Secondly, the complexity of the market – it’s too different to ordinary banking and it has been seen as pragmatic to wait for the world to simplify. And thirdly because they can’t see where they fit in.
Charles knows what he’s talking about – but I just don’t get it. Slow adoption – yes, I get that – but you only know that with hind sight. Waiting for the rush before you develop your offering is to guarantee you’ll miss out.
Complexity? Banks are very good at operating in extremely complex environments, across geographical and political boundaries with multiple technology platforms and numerous competing players. The banking business world is about as complex as it gets.
And the final point – where do we fit in? Let me answer this one. The banks fit in where they’ve always fitted in – as the facilitators of commerce – and this is exactly where they can fit in with e-invoicing.
I’ve never seen the banks as being great innovators – in the sense that they rarely do new things. What they are very good at is doing old things in new ways. New way’s of packaging financial instruments, new ways of lending, new ways to make a turn on trade and commerce but fundamentally, doing the some old things in new ways. That’s all e-invoicing is and if the banks don’t get stuck in, the e-invoicing networks will become further embedded and will be put in prime position to take the banks on at what they do best.
Barnes and Noble in 1997 had exactly the same issue with the virtual on-line operation that was selling books. It wasn’t a threat. It was a totally different business model.
Whatever happened to Amazon?