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This looks like another nail in the coffin of those banks that cannot transform the way they lend to companies. By doing so these banks will lose the (apparently risky) SME market completely.

Chris, you make very valid points. I would like to add that what corporates want is not necessarily what the treasurer (or CFO) wants. Corporations are complex organisms and other constituents play a relevant role, if not as final decision makers for the kind of solution to adopt at least as strong influencers: the Procurement Officer, the Supply Chain Manager, the Sales manager, and the CIO. I expect Transaction Banking Suites to also cater to the needs of these corporate executives as much as to the "usual suspects",i.e., the treasurer and the CFO.

I must say I was expecting this news for some time now. However, as they say, better late than never.

It is a fact that lending is the natural extension of payment services, especially when it comes to small-medium enterprises (SMSs). Well done, PayPal.

I think this will be a threat- in the short-medium term- more to credit card companies than to banks. I have seen some credit card players making steps into supply chain finance (after all that's what we are talking bout here)- e.g., Mastercard, VISA, Amex- with alternate fortunes.

Banks will follow suit down the drain if they don't find a way to properly assess and price the risk of their SME clients.

The solution? My current research on "actuarial tables" for supply chain management makes me believe the answer is there.

This interview validates what anticipated in https://www.finextra.com/blogs/fullblog.aspx?blogid=6729

The common theme of my conversations at Sibos was that in a period of recession and credit crunch the increasingly complex and costly support services within banks to serve their corporate clients are prime candidates for cost reduction and simplification. Since one of a corporation’s most critical processes is payments, banks are helping their corporate clients by focusing on streamlining payments processes.

The jury is still out to decide whether banks will still buld in-house or seek for external technology platforms.

This announcement is really important and validates what I anticipated about treasury management systems (TMS) becoming the platform for the convergence between cash and trade. While it is usually the norm to read about this kind of convergence happening on bank-owned platforms, the true element of innovation and competitive advantage is that the convergence runs on a TMS platform. The platform becomes the decision support system for the treasurer who can now control all the company's sources and destinations of cash from a single point of observation.

I expect the news will attract the attention of corporate treasurers.

It is a fact that the SaaS-based nature of both solutions has made the integration possible. IT managers wish little or no "intrusion" in their company's existing IT architecture.

I am normally cautious when commenting press announcements but this one is really important and validates what I anticipated about treasury management systems (TMS) becoming the platform for the convergence between cash and trade. While it is usually the norm to read about this kind of convergence happening on bank-owned platforms, the true element of innovation and competitive advantage is that the convergence runs on a TMS platform. The platform becomes the decision support system for the treasurer who can now control all the company's sources and destinations of cash from a single point of observation.

I expect the news will attract the attention of corporate treasurers.

It is a fact that the SaaS-based nature of both solutions has made the integration possible. IT managers wish little or no "intrusion" in their company's existing IT architecture.

Very effective and informative interview. I would like to add one consideration: What the corporate wants is not (necessarily) what the corporate treasurer wants. It is not  uncommon for companies to have internal ‘silos’ with lines of business (LOBs) such as sales, procurement, logistics, treasury and IT each having various goals that conflict, making it almost impossible for a bank to provide a holistic solution that addresses each LOB’s requirements.

Bottom line: There are many "customers" to serve. Some are just influencers while other are the decision makers. It is important for the bank to distinguish which is which and have for each a selected and tailored approach.

I recently posted a blog article on this topic in https://www.finextra.com/blogs/fullblog.aspx?blogid=8073

Tungsten has the right ingredients. But is Tungsten a good cook? Using another metaphor, they have key orchestra players, but is the director as good? I will like to see how Tungsten will blend the various ingredients to build a solid value proposition. So far they certainly enjoy not being a bank, therefore not being subject to regulatory restrictions and limitations. At least until shadow-banking will not be put under the scrupulous lens of the regulator. This gives them quite some room to operate. As in any supply chain finance program the issue is not to have a good lineup of technology and products, but to create value to the corporate user. That is something that technology cannot buy.

The fact they are not bankers also gives them additional edge, as a bank-centric strategy has never helped these initiatives to succeed. Just see what happened to JPM/XIGN, and, very recently, to USBancorp/VISA. Banks tend to buy/develop software and then use it for internal purposes before extending it out to clients. So the resulting solution (i.e, the "platform") is very effective at optimizing bank operations and STP at the expense of the end user who has to duplicate data and re-key information before enjoying the benefits.

The spend analytics component is indeed intriguing and shows a good vision. Again, only time will show how successful their approach of adding this component to the puzzle will be. In its own, spend analysis is not new. Certainly not for players of the likes of Ariba or Basware.

So I will carefully watch how Tungsten will make it a competitive differentiator.