According to Perlstein, Fintech is Changing the Energy Industry
With a single invoice that could total millions of dollars, the settlement department is ultimately responsible for the company’s entire cash flow, credit rating and solvency. In playing such an essential role in maintaining the financial stability of large companies, this department needs all the help it can get – and financial technology is giving it exactly what it needs. By making corporate functions simpler, quicker and more efficient, technological advances are driving progress. And yet, behind the scenes at some of the top energy companies of the world, settlements are still lagging behind. With technology improving every day, why are these departments struggling?
Too Much Paper
To keep moving in an upward trajectory, especially in large energy companies, settlement departments have to continuously keep things moving. Every complicated transaction made has to be analyzed and reports have to be drawn up. The amount of data produced during this process is staggering. And each task involved in this requires resources. Many settlement departments are inundated with paper and manual processes making this task time intensive and complex.
Not Just About Getting Bills Settled
In any energy company, the supply chain is highly complex, risky and volatile. One chink in the chain can cause major delays in processes and ultimately in payments being made, making the settlement departments’ tasks even more challenging. Besides creating issues with payments, problems with processes can cause major upheaval when not effectively managed. There is also the risk of human error to consider, something that commonly happens with processes driven by people. Often when companies are flush with cash, overall efficiency is overlooked.
Sharone Perlstein: Fintech Provides Innovation and Expertise
Known for its achievements in improving several sectors, Fintech has now started working with the energy industry with a goal of improving governance through technology. As with previous successful interventions it is expected that expenses and credit risk in energy companies will be lowered by Fintech. The current, and largely ineffective, system involves analysts pulling data from various areas and amalgamating it into a single output to be analyzed. This can take time and is error-prone. With Fintech’s advanced methods this is done automatically for improved speed and accuracy.
Transforming the Energy Sector
Fintech’s methodology includes payment processing, data risk management across the supply chain, cash flow analysis and prediction. With more efficient systems operational costs are cut and payments are made and received quicker through technology. The settlement department, in particular, benefits from Fintech’s innovative systems. Analysts are freed up to perform thorough audit functions that assist with speeding up the complete process. Smooth transitions are ensured through centralized data systems. By integrating data systems and collaborating across the industry, systems are run more efficiently throughout the entire supply chain process. Through working well beyond the scope of dealing with back-office functionality Fintech has become a highly regarded element and is seen as having the potential to transform the entire industry.