Bank/fintech collaboration: how Societe Generale Factoring places client needs at the heart of its strategy

By entering the market with new technological solutions, fintechs have undoubtedly helped boost the working capital and debt finance markets. The result is more simplicity, flexibility and efficiency for clients. But these new entrants also need to rely on large established banking groups, whose value proposition is complementary: this is the whole reason for of the recent collaborations that Societe Generale Factoring has developed with the fintechs CRX Markets and WeFi- WeFi Technology Group.

CRX Markets and WeFi two fruitful collaborations with Societe Generale Factoring

The first, CRX Markets, a German fintech specialising in supply chain and receivables finance, saw in Societe Generale Factoring a key partner for developing its solutions in the French market, and more broadly in Europe. Indeed, CRX Markets aims to constantly expand the number of its key partners capable of working capital financing, to make its services as attractive as possible. Societe Generale’s strong positioning in the large corporate segment in Western Europe has made this partnership very relevant.

As for the second, WeFi - WeFi Technology Group, a leading American provider of IT finance solutions, sought a financial institution in France to integrate into its global platform.

In both cases, the synergies were obvious: for fintechs, the development of technological solutions (incl. connectivity with ERP systems) and the simplified daily relationship with clients; for Societe Generale Factoring, financial expertise, financing and robust and industrialised processes to execute a large volume of payments.

CRX Markets’ CFO, Alexei Zabudkin sums up this synergy well:

“We are very happy to welcome Societe Generale Factoring as a financing partner to the CRX Marketplace. A key bank to a number of our existing and prospective clients in Europe with a strong advisory angle, Societe Generale can play a significant role in enhancing the working capital management of our joint clients. The bank’s focus on its core strengths and its willingness to onboard best-in-class fintech partners serve as another confirmation of the validity of a bank-fintech collaboration.”   

At the center, the client largely benefits, since he now has access to more agnostic, technological and optimised solutions to meet his financing needs. It also benefits in terms of costs and implementation deadlines, since technical, legal and IT developments are carried out as much upstream as possible by the bank and its partners, to facilitate the “industrialisation” of debt and/ or working capital financing.

Objective: remove client’s entry barriers together

Until now, too many companies were held back by a lack of internal resources to deploy supply chain finance programs for their suppliers. These require establishing connections between banks’ information systems and clients’ accounting tools, while ensuring compliance and security rules. An approach which has every interest in being shared, thanks to the contribution of fintechs which can play a facilitating role. By jointly removing barriers to entry - and even by pooling our commercial efforts when relevant - we are convinced that this type of bank/fintech partnership can contribute to the development of the debt finance and supply chain finance market, and to the democratisation of this method of financing.

However, the multitude of intermediaries operating in this market segment and the lack of standardisation (legal, operational, IT, financing scheme, etc.) makes the implementation of such partnerships complex and time-consuming. In this context, the bank’s main challenge lies in the identification of a few strategic partners, capable of offering the most value for clients and fully meeting its long-term vision.