Proptech meets fintech: Construction software platform Aconex eyes payments

Aconex is planning to expand into financial services by using operational data about subcontractors and their projects to help lenders price credit to them.

The business that sells construction software to let companies exchange project information and track progress was looking to develop a payments function on the back of its newly launched Connected Cost product, executive director and head of product and engineering Rob Phillpot said.

Aconex saw an opportunity to ease the cashflow pain felt by subcontractors, who often had to wait for payments from higher-level contractors even though they had already paid their own costs, Mr Phillpot said.

While some subcontractors, particularly larger ones, factor their invoices – sell them to a financier to ease cashflow constraints – not all can. Combining information about the state of a particular subcontractor’s project and their working history could create a risk profile for a wider range of subcontractors that would help a lender offer credit at an appropriate interest rate, Mr Phillpot said.

“We’re not talking about being a bank but helping bring parties together,” he told The Australian Financial Review.

“There’s an opportunity to offer the information we have about the payments that may be coming through to help them out. The better quality information you have about their work, their history and the people they work with, the more you can make a judgment about their risk profile. The better you understand the risk, the lower the interest rate.”

The fintech-meets-proptech move, about which Mr Phillpot declined to give further detail, marks a further disruption of traditional financial services but this time by the construction industry, which is finding its own practices and methods challenged by new ways and players.

Aconex has already included cost management functions in its system.

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Source: Proptech meets fintech: Construction software platform Aconex eyes payments | afr.com