Incomlend is an invoice exchange platform that connects global corporations with communities of investors, enabling them to buy and sell individual invoices online.
Here The Fintech Times speaks to Morgan Terigi, Director and Co-founder of Incomlend about how advanced fintechs are reshaping and leading a new way of investing, particularly through their use of Blockchain, in the global shipping industry.
How are Fintechs reshaping investing, particularly with Blockchain, in the global shipping industry?
Fintechs are playing a huge role in reshaping investing, particularly in the global shipping industry. In particular, blockchain has the potential to be very disruptive because it records any and all changes made to a document. The shipping industry is very traditional, and the bill of lading (the document that confirms receipt of cargo for shipment) has hardly changed in centuries. Because of this, there have been many issues with fraud. For example, multiple financing on a single transaction. This could be presented by adopting electronic documentation and blockchain technology. Blockchain lets you see the history of the BL (bill of lading), which means you can check if it’s been financed or not. As well, it’s very secure. No revealing information is disclosed so privacy is easily maintained. This protects financiers from fraud while allowing them to maintain privacy.
Why are alternative financiers so important, and how do you reduce the risks most commonly faced?
There are many alternative lenders and financiers out there. From Incomlend’s perspective, we work to make both the buyer’s side and exporter’s side as convenient as possible. Fraud is the greatest risk, whether you’re a company or an individual. For everyone, having access to financing is the most important thing. Next is diversity. I think the marketplace approach is very interesting, where technology manages multiple parties. One example of this that we do is stepping in and buying a receivable. The third element to reduce the risk of fraud I’d say is the usage of technology to make assets safer. When I say “assets safer” I’m referring to understanding in the early stage of a transaction who is acknowledging a transaction, who is confirming, and who is providing information as well as seeing what changes have occurred. You want to centralise everything through a platform, like what we do, so you don’t have emails from multiple sources and avoid miscommunications, both intentional and unintentional.
Why are cross-border capabilities so important at the moment, and how have fintechs helped with this?
As the pandemic grew, many banks decided to pull the plug or pause. Fintechs were able to jump in and offer alternative access to financing. Particularly, many players in the commodities space came to fintechs. As well, supply chains moved around a lot. This was because fo COVID-19, but it was also because of the trade wars that have been happening globally. Fintechs could provide financing much faster than traditional methods. Additionally, it was easier for fintechs to follow customers. Banks follow a much slower, more traditional model that doesn’t allow them that kind of agility.
What are some of the greatest challenges that fintech entrepreneurs face?
Our greatest challenge is movement. 2020 saw things moving quite a lot. Underwriters’ appetites have changed. Credit limits have been reduced, we’ve seen some brought down to zero. That appetitive change has led to shifting from one industry to another. Incomlend is in an industry that has boomed, but we’ve still had the same issues that institutional investors have experienced. They’ve been hit by redemptions on their side, and there is some uncertainty about which trade corridors they still want to invest in. What they invested in last year is completely different from the past few months. It’s a lot of change in an industry that has been very traditional and has typically looked for things that are relatively stable, at least in terms of data.