- 25 Dec
Using Hyperledger Distributed Ledger Technology In Invoice Finance
One of the sponsors of the Alternative & Receivables Finance Forum 2019 was a firm called INVIOU. I have had some follow up discussions with their CEO and Founder, Dror Shapira about the technology that they are about to launch in the UK. It offers credit providers and insurers a way to diminish fraud associated with sales receivables, using distributed ledger technology.
Distributed Ledger Technology
INVIOU's network is a financial documents and charges registry. Data is recorded in an immutable and encrypted manner such that it is only accessible to permitted users via an advanced privacy protection algorithm.
Reducing Receivables Fraud
Funders are able to use INVIOU's registry to verify invoice ownership and its availability for financing. It can greatly diminish the costs associated with fraud and friction which can arise from faulty, inflated, fictitious or duplicated invoices. These problems are the bane of the receivables financing sector, and several funders are known to be looking at this type of technology to reduce the risk from fraud.
Their offering uses Hyperledger Fabric which is one of the blockchain projects within Hyperledger, and is supported by IBM. In a similar way to other blockchain technologies, it has a distributed ledger, uses smart contracts, and is a system by which participants can manage their transactions.
The product currently addresses individual invoices, but they plan to expand their offering to include whole turnover services next year.
Invoice recording is free (subject to approving standard terms and conditions), invoice checking and other services are offered in a tailored package or on a pay-per-use basis. INVIOU advise that all fees are negligible in comparison to overall financing costs.
If there are any funders that would like to better understand the potential application of this technology to their receivables financing portfolios, please use this online form to request a call back from INVIOU.
Related article: Applying Blockchain Technology To Invoice Finance.