“There’s a lot of demand from corporates in Asia for supply chain finance but the know-how is not prevalent – that’s why there’s a need for this kind of forum, for our members to use SCF in a much more efficient and effective manner.” So said Seng Ti Goh, president of the Association of Corporate Treasurers Singapore, on the eve of the third annual SCF Forum Asia. (See the video of the day)
With more than 150 delegates travelling to the National University of Singapore’s campus, this year’s event showed how far supply chain finance has come in three years. SCF was once something accepted and implemented by Asian treasury teams but usually driven from Europe or the US; now it has become a working capital tool for many corporates across Asia, with Chinese fintechs among the leading players in developing new ideas in the field.
This trend was very much on display at SCF Forum Asia, perhaps epitomised by Taulia, which opened up its first ever Asian operation just a few months before the event. The first of the day’s two major case study presentations showed how important that move could be: Rio Tinto shared the first results of its Taulia-powered dynamic discounting programme and hinted at much more to come.
The second case study was also a clear demonstration of the growth of SCF in Asia; Bernhard Weiskirch had travelled from Siemens’s Beijing office to present the company’s global SCF programme, developed with Orbian, which won Gold in the 2018 SCF Awards.
While the fintechs were in the driving seat for these examples, they didn’t have it all their own way; two of the day’s breakout workshops sparked some spirited debate about the relative roles of banks and fintechs in providing better solutions for corporates.
Daniel Choon Choong Lit, executive director global trade products at DBS Bank, moderated the first of these under the title The Supply Chain Finance Ecosystem: How banks and fintechs are working together to deliver better solutions for corporates.
Lit invited panellists from Bank of America Merrill Lynch, Marco Polo, Capital Chains, FCI and Chinese fintech WanXiang Blockchain to outline their own views – but a challenge quickly emerged from Eugene Buckley of Marco Polo, who suggested that the disconnected nature of platforms and bank offerings meant they could not offer the integrated solutions corporates wanted. It may be no coincidence that Marco Polo itself is one of the so-called ‘consortia’ networks which aim to fix that problem. Steven van der Hooft of independent consultant Capital Chains responded: “A single networked platform for trade and SCF? We say to the consortia – bring it on! But we don’t see it yet – and we need it!”
While the banks and fintechs were learning to co-operate in one room, in another, they were discussing a driver for SCF that goes beyond working capital. Research from consultancy BSR shows that only 13% of corporate sustainability teams have ever spoken to treasury and, with so many corporates having environmental responsibility as a key objective, that might need to change. Roberta Pinamonti of BSR took us through some of that research, while Sabine Oudart of BNP Paribas outlined why encouraging sustainability through trade finance had become a key part of the bank’s offering, using the example of tea financing in co-operation with sustainable trade tech platform Halotrade. In the same session, Kavic Muruganathan, Deputy Director, Sustainability at supply chain platform HeveaConnect gave an insight into how a co-operation with DBS had seen finance used as an incentive to produce rubber in a sustainable way.
Conference moderator Michiel Steeman, executive director of the SCF Community, continued the sustainability team with a brief introduction to the Circular Economy and how it relates to supplier finance.
The day ended with two more breakouts. One of these was a ‘fireside chat’ session that was both restricted to corporate treasurers and ‘off the record’, allowing those present to speak freely about their approaches to supply chain finance. What emerged was a fascinating insight into how Asian corporates are coming to see supply chain finance as an essential part of the working capital toolbox.
At the same time, Infor, Linklogis and Microsoft were sharing visions of how data from the ‘real’ world can be used to make better financial decisions.
As delegates left the NUS Campus, the talk was of new connections made and keen anticipation of next year’s event, already scheduled for May 2020 in Singapore.