Abbey and 0B10 in e-invoicing supply chain financing partnership

First JPMorgan bought Xign, the global settlement network it had worked with since 2003 as part of its Order-to-Pay solution, enabling customers to automate purchase order delivery, invoicing and payments.

Xign's network boasts more than 40,000 suppliers and it would be fair to say that JPMorgan has made some interesting acquisitions (including its purchase of logistics company Vastera) in its efforts to integrate itself deeper into company's supply chains.

Now Abbey UK Corporate Banking, part of the Banco Santander group, has teamed up with e-invoicing network OB10,which enables buyers and suppliers to send and receive invoices electronically without having to implement hardware or software, as part of its "payer-centric" Supplier Payments solution, aimed at large and mid-tier UK corporates.

Supplier Payments builds on an existing supply chain financing solution within the Santander Group which uses reverse factoring to pay suppliers earlier based on the fact that the bank has received instructions from the payer to settle invoices on maturity.

Teaming up with OB10 allows Abbey to provide a more complete end-to-end solution that not only provides financing but also automates the invoicing component for faster receipt and approval of invoices and the associated cash flow benefits.

OB10 counts Hewlett-Packard and Sara Lee as customers and it has done the hard work in terms of ensuring VAT and e-invoicing compliance in the regions in which its operates; Europe, North America and Asia. It also takes care of the data formatting so firms do not need to worry about data conversion or supporting different invoice data formats.

OB10's network addresses both the Accounts Payable and Accounts Receivable side, but historically accounts payable functionality has not been top of its agenda as it has with other e-invoicing vendors such as BasWare, Ariba and Xign. Up until now, OB10 had largely focused on automating paper invoices and invoice delivery rather than the actual payment or cash flow benefits of enabling suppliers to get paid earlier.

For more information on Abbey's supply chain financing solution read the full transcript of an interview with David Goucher, managing director, Abbey UK Corporate Banking, in the latest issue of financial-i.

Firms criticise regulators for lack of guidance

As the November deadline for the Markets in Financial Instruments Directive (MiFID) looms ever closer, sell-side firms are praying for a miracle: that national regulators will provide them with more guidance and support.

I remember some weeks back citing PJ DiGiammarino, CEO of the MiFID think tank, JWG-IT, who told firms at one of its many workshops that as MiFID is a "principles-based" regulation, firms should not rely on the regulators to provide them with much guidance when it comes to implementing MiFID.

Yet, MiFID Readiness findings from a year-long survey of 300 buy and sell-side firms conducted by SunGard and TradeTech, indicate that more than half of respondents felt national regulators were either “bad” (32%) or “very bad” (19%) in helping them prepare for MiFID.

In the UK, the Financial Services Authority (FSA) prides itself on its principles-based approach to regulation, and has tried to move away from a prescriptive approach, which has caused consternation in other markets, namely the US, where regulators were lambasted for taking a too prescriptive approach to regulations such as Sarbanes-Oxley.

But according to the survey findings, only 54% of firms believed that a principles-based approach was the best approach when it comes to MiFID, with the remaining respondents stating that it “makes it difficult to understand exactly what requirements the FSA desires, adding to the compliance task”.

Yet, despite their dissatisfaction with the lack of guidance from regulators, it does not appear to have prevented 53% of firms from declaring their preparations for MiFID to be “ahead” or “right-on-track”, compared with only 34% of firms surveyed in September 2006.

The survey findings appear to highlight some anomalies in the market. Firms would be quick to criticize regulators for taking a too prescriptive approach to regulations like MiFID, yet on the other hand they seem to desire some hand-holding. It appears that the regulators are damned if they do and damned if they don't and those firms that require hand holding or guidance are unlikely to recognise the opportunities MiFID presents to launch new initiatives and "strategic reforms".

It is worth noting that if all sell-side firms required guidance on MiFID from the regulators, then Project Turquoise and Boat may never have existed.