Euro 3 trillion – that's the factoring turnover in 2021 worldwide, as reported by FCI Association. That is 13.6 per cent higher than in 2020 and it’s expected to grow by 6 per cent every year. It not only shows that the factoring industry is resilient to crises and macroeconomic turmoil, but that factoring is becoming increasingly attractive to businesses.
What is its worth to the industry?
For banks and factoring companies, the advantage of factoring is that they can tap into an ever-growing market. By providing access to financial products at the very start of a company’s operation, banks are more likely to keep their customers close. Customers will appreciate that when their company was in need, the bank gave them growth opportunities.
As a product, factoring is much safer than traditional credit. It has the added advantage of better counterparty control, soft debt collection and the assumption of risk by the insurer, who plays an increasingly important role in factoring agreements. The assumption of the risk by the insurer is not only beneficial for the factor or the bank, but also for the end customer, who can have peace of mind.
Factoring in the Gulf region
Invoicing is the fuel that keeps commerce going, and there is huge demand for an alternative to bank loans, which can be difficult to secure and expensive to service, for SMEs in particular.
Similarly to other markets worldwide, it is to be expected that factoring in the GCC region will also grow. Banks should prepare for increasing volumes of financed invoices not only by expanding their teams and digitalizing the process, but also by using efficient and modern factoring solutions for both end customers and bank employees. Those three are the most important factors for growth in the industry.
A better software means greater opportunities
Comarch has recently launched Comarch Factoring Platform (CFP) for banks in the Middle East and factors to help them keep their cost and workload to a minimum while managing the end-to-end invoice process in a seamless manner along with delivering amazing customer experience.
Comarch Cloud Factoring gives its clients the essentials of modern digital platform and takes all of the headaches out of running a new venture, or bringing older systems up to date. Thanks to solutions such as this, financial institutions can safely bet on factoring as the hot product for the coming years.
To learn more about Comarch Factoring Platform for banks in the Middle East, email email@example.com