Foreign exchange risk, non-payment risk and digital transformation: import-exportech solutions by Ebury and Invenium Legaltech, for large and small exporters.
Ontologically, exports imply a choice of currency. For example are very interesting the analyses proposed by the World Trade Organization. The research trace that the structural reasons for the predominance of dollar and euro as historically dominant currencies in the international scenario. Invenium Legaltech and Ebury are working together on import-exportech solutions.
World – however – is changing fast. In december 2023 BRICS institutional website highligthed that: ” the UAE is in talks with 15 countries and is promoting local currency payments ending reliance on the U.S. dollar. The realigning of bilateral strategic partnerships could lead to a paradigm shift in the financial approach of BRICS countries. Controlling the global oil sector by ending reliance on the U.S. dollar could make BRICS turn into an economic powerhouse.”
The entry of potentially less stable currencies into international transactions makes it even more urgent to be aware of the exchange rate risk. Not only for large large companies, but also for exporting SMEs that – for instance, in Italy – build 50% of exports.
At the same time, the increasingly unstable international context – with continuous and unpredictable changes in supply chains, in procurement and transport costs, in the instruments of protectionism (overt or “disguised”) that many countries use to protect local markets – makes the risk of late or non-payment even higher. A risk that very often cannot be covered (or fully covered) by contractual clauses, insurance or bank guarantees.
This is an essential issue, which does not only concern profit margins and profitability, but the very sustainability of the business model. It would therefore be profoundly wrong and anachronistic to conceive of “debt collection” as a marginal and episodic activity. In reality it is one of the fundamental issues of many CFOs.
To mitigate and manage these risk profiles, it is essential (for all exporters) to include control tools in their processes that – today – must combine solid “human” skills with fast, effective, accessible digital tools. On these principles Ebury and Invenium Legaltech cooperate in the ambitious “import-exportech” project born in the context of MIND-Federated Innovation.
Under the title of “Milan as the accessible HUB for Import-Exportech” a new vertical of innovation is emerging, dedicated and focused on the specific objectives of many thousands of exporters. Certainly, primary attention is paid to the protection of credit and payments, from multiple and differentiated perspectives. A protection that takes place through dedicated platforms that – using machine learning systems, Application Programming Interface procedures, AI – allow all companies to activate extremely sophisticated support processes: manage multipayments, hedge against exchange rate volatility (Ebury), initiate in-depth analysis on “Non-Performance Export” and activate legal teams all over the world, with a few simple steps (Invenium Legaltech).
Each player is focused on a specific sector and need, potentially combining its support with additional tools available in the Fintech/Insurtech/Regtech area, promoting an integration of services and a speed of execution that is essential to intervene promptly. This digital transformation process allows to make data-driven decisions, reduce operating costs, manage risk and maintain one’s competitiveness at a global level.
For more information on the Import-Exportech project or on international debt collection services, write to info@invenium-legaltech.it or consult our website. For further information or operational needs on the topic of exchange rate risk management and Trade Finance services – import financing, please visit the Ebury corporate website.
