IoT + BaaS = business financing possibilities

The past five years have brought many changes to the field of business financing: new products for business, convenient interfaces, and quick loans. Financial companies are adapting to clients’ needs as much as possible.

There are attempts to automate the analysis of legal entities.

However, real-time evaluation of creditworthiness still seems impossible.

One part of this evaluation — the analysis of a business’s cash flows — remains highly labor-intensive.

BANKEX propose changing that. And we know how!

The current business evaluation procedure

What does business analysis look like from the inside of the lending department of a typical Bank?

In order for the Bank to determine whether the debtor will be able to repay the loan or not, the Bank’s loan officers need to analyze expected cash flows and evaluate the solvency of the business across the crediting period. This means analyzing current revenue and expenses, including the received loan as revenue and the spending thereof as expenses, and analyzing potential changes in market conditions.

This analysis has historically been performed manually by the loan officers at Banks and financial companies. Depending on the complexity of the project, it has taken from two days to six months of various specialists’ work.

This manual labor has not allowed for the online financing of a business, and has increased the cost of a loan to both the Bank and the client.

This is why small business loans have traditionally been expensive and not always available on time.

But modern technology has opened up new possibilities for dealing with this problem.

Current cash flows are already analyzed automatically.

Progressive manufacturers are already moving to blockchain systems with IoT sensors for production control.

This allows implementing the technical integration of producer data in real time.

How does this influence a business’s access to capital?

The data must no longer be collected manually from various accounting systems and expense documents; instead, an automated cash flow can be modeled which does not depend on the accountant’s subjective opinion, but is instead automatically retrieved from relevant sources.

The data of large manufacturers is also digitized, enabling the automatic formulation of estimates with verification of IoT availability.

Manufacturers will soon be able to provide cash flow figures in real time.

The same applies to benchmarks and price growth dynamics across different industries.

Thus the solvency of a business can be analyzed within a few minutes’ time.

Business data digitization is now unstoppable!

Five years from now, Bank officers will no longer be digging through massive document folders in order to build business cash flows and evaluate solvency.

All current data will be retrieved through API from the corresponding sources.

This will take place according to the models of in-house decision making as well as BaaS (https://blog.bankex.org/fintech-revolution-bank-as-a-service-739d360527ea).

This will also ensure that the evaluation of the Clients’ solvency and creditworthiness is as up-to-date as possible.

A quality evaluation of the client will then provide the business with speedy access to capital.

And we are already participating in this process.

BANKEX is creating a suite of instruments for automatic business evaluation to ensure the fastest possible access to capital.

This is the technological answer to the business’s request to receive funds in real time.

Join BANKEX and let’s build the future of fintech together!