• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Blogs » Think Tank » Supply Chain Finance: Trends, Challenges and Questions for 2019

Think Tank
Think Tank RSS FeedRSS

Supply Chain Finance: Trends, Challenges and Questions for 2019

Supply Chain Finance: Trends, Challenges and Questions for 2019
May 9, 2019
Will Moody, SCB Contributor

Supply chain finance is a large and growing industry. In 2015, a McKinsey report suggested that SCF had a potential global revenue pool of $20bn, while in 2017 China’s supply chain finance sector was tipped to reach US$2.27trn by 2020. Additionally, a 2017 ICC survey of banks in 98 countries identified SCF as the most important area for development and strategic focus in the coming 12 months.

Clearly supply chain finance is an important topic for anyone involved in trade and trade finance to be familiar with. However, at a recent ICC Academy summit on SCF, several speakers suggested there are still trillions of dollars’ worth of unmet needs in this market.

According to Roberto Azevedo, director general for the World Trade Organization, “A lack of access to trade finance is a barrier preventing small business from making the most of the opportunities that trade provides, and it demands our urgent attention.”

So what are the latest challenges facing the SCF industry? And what questions must it address to drive future growth and fill the currently unmet financing needs of small to medium-sized enterprises (SMEs) around the world?

Earlier this year, at the 8th edition of the Supply Chain Finance Summit in Singapore, the ICC Academy heard the views of more than 300 senior supply chain finance professionals from more than 10 countries.

Here are three key takeaways from their discussions:

SCF can be a win-win for both SMEs and corporate banks. Asia’s domestic supply chains are very large. Estimates from industry bodies such as the International Financial Corporation and Asian Development Bank suggest significant opportunities in emerging markets for domestic supply chain finance business. They include US$6-8bn in Bangladesh, $19bn in Pakistan, and $20bn in Indonesia.

Qamar Saleem, the global technical lead for the International Finance Corporation at the World Bank Group said: “With the current market gap, there is huge opportunity. When done right, SCF can be a win-win for both SME and corporate banks.”

For SMEs, benefits include new segment opportunities, market distinction, faster scalability, increased sales effectiveness, and stronger relationships with their clients. Corporate banking benefits include competitive differentiation, key corporate access, increased revenue share, better risk management, cash-management mandates and increased retention.

The SCF ecosystem is large enough to sustain both banks and new financial technology (fintech) players. Fintechs have long been positioned as a challenger and potential threat to banks in many industries. The nature and extent of this existential threat for the supply chain finance industry was addressed during our session “Fintech vs. Banks.” All panelists were of the view that third-party entrants and non-bank players are here to stay.

Commenting on the rivalry of the two sectors, Olivier Paul, director of finance for development at the (ICC) Banking Commission said: “The financing gap is a reality today. Banks and fintechs are evolving, and the SCF ecosystem is large enough for all parties to not only survive, but collaborate within the financial services sector and thrive.”

Shirish Garg, head of supply chain finance sales and client delivery transaction banking office for Asia at MUFG Bank, believes that “the key challenge for both players is to focus on solutions that can deliver effective results. We are seeing too much of the same, hence differentiation has become an issue.”

The most important business improvement is not technology but an upgraded workforce. In a world of increasingly large and complex supply chains, technology, digitalization and automation often grab the headlines, and are presented as the solutions to the challenges that come with these huge networks. In such an environment, it can be easy to look past the importance of people in improving business efficiency and profitability. However, Lionel Taylor, managing director of Trade Advisory Network, believes that “the most important new development in any business is not technology — it is an upgraded version of your workforce.”

Taylor said that when he talks to banks and regulators around the world, cultures, practices and regulations are often different. This means that the latest app or technology might look good, but a lot of the time it’s not relevant to those markets at that point in time. What these businesses are always interested in, however, is training the workforce and building capacity. These businesses often face skills gaps, and don’t have the resources in house to solve them.

Regardless of which sector your business operates in — whether it be universities or banks — keeping up to date with current trends and practices is no longer a choice, but a necessity. Having a better-trained workforce is also a differentiator in a market where everyone is competing to have the latest and most impressive digital platform.

And speaking of pursuing those goals, you can read the ICC Academy’s Comprehensive Guide to Supply Chain Finance here. This guide is ideal for anyone looking to grasp the key techniques involved when it comes to supplier financing, and contains case studies from real businesses involved in the SCF industry.

Will Moody is communications manager for the International Chamber of Commerce Academy.

Supply Chain Finance & Revenue Management

RELATED CONTENT

RELATED VIDEOS

Wake up to live
“Supply Chains in Crisis”
updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • INTERIOR OF A CHICKEN FARM, WITH WHITE CHICKENS AS FAR AS THE EYE CAN SEE

    Worst Avian Flu in U.S. History Is Hitting Poultry

    Food & Beverage
  • TWO FINGERS MANIPULATE WOODEN LETTER BLOCKS TO TURN FROM SHOWING THE WORD RECOVERY TO RESILIENCE

    Five Challenges to Supply Chain Resilience in 2023

    Supply Chain Visibility
  • A PERSON HOLDS UP A TABLET COMPUTER IN A WAREHOUSE, SUPER-IMPOSED BY A GRAPHIC SHOWING A COMPLEX WEB OF SUPPLY CHAIN ELEMENTS

    Three Post-Pandemic Actions for Repairing Global Supply Chains

    Data Management (Big Data/IoT/Blockchain)
  • A MAN IN A SUIT SHAKES HANDS WITH A WOMAN IN A HARD HAT, NEXT TO A STACK OF CONTAINERS

    Three Procurement Technology Evolutions for 2023

    Sourcing/Procurement/SRM
  • The blank stare of a child's eye who is standing behind what appears to be a wooden frame

    The Alarming Continued Rise of Modern Slavery in Supply Chains: How Procurement Can Help Reverse the Trend

    Sourcing/Procurement/SRM

Digital Edition

Scb nov 2022 sm

2022 Supply Chain Innovator of the Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Honeywell Intelligrated IFM
Infor Inmar Keelvar
Kinaxis Korber Lean Solutions Group 2H
Liberty SBF Locus Robotics Logility
LogistiVIEW Lucas Systems MCA Connect
MPO Nvidia Old Dominion
OpenText ORTEC Overhaul
Parsyl PMMI QIMA
Redwood Logistics Ryder E-commerce by Whiplash Saddle Creek Logistics
Schneider Dedicated Setlog Holding AG Ship4WD
Shipwell Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing