Estimated reading time: 5 minutes
As the factoring market continues to flourish, the growth of the industry is evident in the evolution of FCI as an organisation. This development is not merely a consequence of a thriving market but rather a deliberate orchestration to unite the industry under a common vision of excellence.
FCI has played a proactive role in shaping the growth of the factoring industry, setting standards, and envisioning a future for the market.
By collaborating with policymakers and key stakeholders across the globe, promoting best practices through comprehensive education, and establishing industry-wide frameworks, the organisation has rightfully earned its position as the global voice for open account receivables finance.
In this video, Neal Harm, (incoming) Secretary General of FCI, sat down with Peter Mulroy, (outgoing) Secretary General of FCI and Daniela Bonzanini, (outgoing) FCI Chairwoman reflect on the organisation’s evolution, strategic initiatives, and the future of factoring.
A decade of transformative leadership
Over the past decade, FCI has strategically navigated the growth and development of both the factoring industry and the organisation itself.
A key part of FCI’s transformative journey involved rethinking its membership approach. Beyond those directly involved in invoice finance, FCI has broadened its membership to include a diverse range of organisations, referred to as sponsor members.
Together, these members share the common goal of building business through network creation and spreading awareness. As Mulroy said, “We wanted to expand the type of members that we can bring in. We’ve not just allowed banks and non-banks, but also what we call sponsor members such as third-party providers and support institutions.”
Furthermore, as the factoring market continued to grow, the need for FCI to scale its global presence became evident. Mulroy highlighted, “There’s no way that one or two persons can represent this organisation globally.”
This has prompted FCI to develop outreach programs and foster relationships with entities such as the United Nations (UN), the World Trade Organisation (WTO), as well as development banks including the European Bank of Reconstruction and Development (EBRD), the International Finance Corporation (IFC), the African Export-Import Bank (Afreximbank), and the Asia Development Bank (ADB).
Mulroy explained that this global engagement resulted in creating win-win relationships between FCI and many entities. He referenced, for instance, the 2016 merger of FCI with the International Factors Group (IFG), stating, “They were a smaller organisation than ours, but they were older. They brought new elements into FCI and helped us change the trajectory of the organisation.”
The union with IFG created the largest association of factoring and receivables finance companies worldwide, boasting over 400 members across more than 90 countries. It also led to FCI establishing itself as a single point of reference for the receivables finance industry globally.
Ultimately, FCI’s strategies over the past decade have steered the organisation towards decentralisation, demonstrating its commitment to collaboration, embracing diversity, and thriving in global markets. “We were a very centralised organisation. Now we’re all over the world across multiple regions,” Mulroy added.
Chairing progress: Shaping the future of factoring
In its efforts to enhance awareness of the factoring industry, FCI has placed a strong emphasis on education. A remarkable transformation in this endeavour, guided by Bonzanini’s leadership, has been the extension of educational resources to non-members, effectively bridging the knowledge gap by disseminating information about the advantages of factoring—how it improves cash flow, mitigates risks, and supports business growth. Cagatay Baydar, the newly elected Chairman, will look to keep this momentum going.
Bonzanini, highlighting this transformative shift, said, “We now offer our educational services not only to non-members but also to individuals. Education is crucial, and through the extension of our services, our aim is not only to emphasise its importance but also to attract the interest of a wider audience.”
Another focus area for FCI in recent years has been Supply Chain Finance (SCF). The company has undertaken significant investments in SCF technology, exemplified by initiatives such as the EDIfactoring system for cross-border factoring and FCIreverse for reverse factoring.
For instance, the FCIreverse platform not only grants members access to an operational platform for onboarding anchor buyers and both domestic and foreign suppliers but also facilitates the involvement of export factors worldwide.
This is achieved by educating suppliers on the various benefits of reverse factoring, guiding them through the signing of local factoring contracts, providing Know Your Customer (KYC)/Anti-Money Laundering (AML) assistance, and potentially offering funding against assigned receivables upon request.
Bonzanini said, “While the nature of factoring remains unchanged, we’ve developed additional solutions to address the needs of international businesses. Simultaneously, we’ve welcomed new members, supporting them in developing their domestic business in various countries and markets.”
By enhancing knowledge and awareness, building capacity and expertise, and leveraging technology, FCI’s strategic initiatives are thereby laying the foundation for a robust and sustainable factoring industry.
Embracing change: The next chapter for FCI leadership
As FCI undergoes a transition of leadership, the incoming Secretary General of FCI, shared his insights into his background, vision, and the transformative path ahead as he prepares to fully assume his role in 2024.
Harm’s journey spans three decades, beginning at Bank of America. From processing invoices to leading global factoring businesses, he witnessed the evolution of the industry. He reflected, “It’s been an amazing thirty years to think back to when I originally touched an invoice, to today, having the opportunity to lead the industry globally.”
Looking forward, Harm envisions a substantial opportunity for FCI to impact corporate growth by supporting companies globally in optimising working capital through factoring.
He emphasised the fundamental role of open accounts, “Every company does open account, and the need for that working capital is significant.” This underscores open accounts as the lifeblood of businesses, with FCI positioned as a leading expert in this domain, ready to make an influential impact on corporate growth.
Moreover, Harm identified an untapped opportunity to expand FCI’s presence in the factoring business, providing crucial support to both clients and the affiliated banks.
He said, “I want to see the percentage of us helping those corporations around the world grow,” underscoring his strategic vision. His aim is to utilise the potential of factoring to boost working capital, thereby playing an active role in the extensive growth of businesses worldwide.
Editors Note: This video was recorded prior to the election of the new FCI Chairman, Cagatay Baydar.