Supply chain finance (SCF) has evolved considerably in the last 15 years. In the early 2000s, bank revenues from SCF services only represented a very small proportion of the total trade finance business. And the wider SCF landscape comprised only a handful of banks implementing payables finance programmes for their largest corporate clients.
Today, appreciation of the benefits offered by SCF is growing. However, there is still room for growth. Indeed, according to McKinsey research undertaken in 2015, only 10% of the industry’s potential revenue pool is currently being met.
Commenting in BCR’s World Supply Chain Finance Report 2018, UniCredit’s global co-head of trade finance, Adeline de Metz, argues technology could play a key role in helping to unlock SCF’s potential moving forward.
“New solutions are being developed to enhance the speed, efficiency and transparency of trade settlement. Blockchain technology is now starting to bear fruit, with the likes of we.trade promising to improve the protection, management and tracking of transactions by aggregating the processes of whole supply chains on a single blockchain register, accessible via an intuitive digital platform”.
De Metz added; “the incoming generation of digital platforms are also helping to remove the geographical and financial barriers to participation in SCF. More and more small suppliers are now gaining access to SCF even when they are based in locations previously too remote for this kind of programme.”
To read the article in full, see p.27-29 of the World Supply Chain Finance Report 2018.