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Big data and artificial intelligence open the door for the customer and the bank to assess the risks together

6 Apr 2021PayRay

Artificial intelligence and big data not only change business risk assessment and management models, but also facilitate corporate financing processes and establish new cooperation principles between the bank and the client. Imlitex Holdings, together with PayRay Bank, uses state-of-the-art risk assessment model (RiskPlanner), therefore Imlitex group companies are able to finance separate retail chains faster and more efficiently.

Imlitex Holdings is a group of companies supplying industrial materials, operating in nine areas, and has developed trading relationships with 70 countries around the world and has an annual turnover of 350 million euros. 

“We are a trading company working with a wide range of products – many customers, suppliers, and countries. We realised the need for more flexible financing solutions, exploiting a very strong customer portfolio and individual retail chains. We use RiskPlanner very widely, from customer risk assessment to supply chain financing. This tool saves a lot of time and reduces costs, and makes the customer risk assessment process more efficient, allowing for continuous monitoring of customer reliability and quick decision-making when risks change” says Austė Augustinaitė, Head of Strategy and Business Development at UAB Imlitex Holdings.

Faster financing of retail chains

According to Augustinaitė, the situation when a bank and a client use a modern risk assessment model together opens a new level of transparency and creates added value.

“With PayRay Bank joining us, we are now able to be more flexible in financing individual retail chains quickly and efficiently, creating even more opportunities to increase sales. Furthermore, greater transparency ensures a higher level of trust between the two parties, thus improving relations and avoiding possible different assessments” adds Augustinaitė.

PayRay, a bank operating in the fintech sector, has been able to quickly integrate financing decision processes and adapt to customer needs. “Technology-based risk assessment allows the financing of the cycle from supplier to final buyer settlement. We can start financing goods from suppliers when they are on their way, and when they reach the final buyer, the amount financed becomes factorised and the debt is finally settled when a particular buyer makes their payment. This benefits our client because working capital is financed according to actual need. Detailed information about goods including their origin, movement, suppliers, buyers, carriers, and transportation to points of sale also contributes to the flexibility of financing, as does information on whether the buyer can use factoring, and what the limit of credit insurance stands at. Such information is extremely important in providing and administering trade financing” explains Paulius Jokšas, Head of Baltic Business at PayRay Bank.

According to Jokšas, the use of such information in real time reduces the risk to the financier, because it is clear where the money is being allocated, and that the period of financing coincides with the real needs of the business, coinciding with actual cash flows.

 More external and internal data

 RiskPlanner was developed in cooperation with Kaunas University of Technology, applying the latest technologies. It comprehensively assesses portfolio, transactional, and logistics risks combining financing and credit insurance services.

“Different levels of risk management are critical for any company operating in ever-changing markets. Combining artificial intelligence and big business data management systems has created a solution that helps companies to identify and manage supply chain risks. It is distinguished by how it integrates the management of different risks on one platform using not only external but also internal user data” says Inga Kudrevičiūtė, Project Manager of RiskPlanner.

This risk assessment model involves many different parameters and layers. Kudrevičiūtė explains that the risk is assessed not only according to the financial reports of the companies, but according to the internal data of the company and the payment culture as well as delays by the users of RiskPlanner.

“Data on the company's credit ratings and payment habits are collected and updated to predict the bankruptcy probability or to set a recommended credit limit. In addition, this model evaluates many specific data, situations, and any emerging risks. For example, logistics risk management is based on cargo tracking, which gives the opportunity to make more accurate decisions in real time”  comments spokesperson of RiskPlanner.

Pay off in real market conditions

The implementation and general use of this risk management model with the funding bank has proved particularly successful in recent years. The situation in the materials market has been intense and constantly changing for some time, and is warming up even more at this time.

“We have been working at full capacity since 2020, so RiskPlanner, together with PayRay Bank, helps to make decisions and transactions in a safer and more efficient way. Our main goal is to make the whole trading process as smooth, quick, and efficient as possible, and to create easy access for investors to a safe and clear investment” concludes Austė Augustinaitė.

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