Fintech is on the rise. But what does that mean for large buyers? This report will give you practical examples of how new and innovative fintech startups can use insights and data triggers to improve and innovate their supply chain management practices. In the future, complex supply chain with difficult governance of information will rely more and more on new technologies for the integrated management of the goods, information and financial flows.
The SCF Barometer is a joint initiative of the Supply Chain Finance Community and PwC. It is a survey aimed at mid to large corporate that investigate the status of the SCF market. The 2018-2019 edition provides an extremely useful ‘snapshot’ based on those actually planning or operating SCF programmes enabling us to reflect where the Supply Chain Finance industry has come from, its current reality and highlights the factors, which will influence and shape the industry’s future direction.
Blockchain, along with smart contracts, promises to change business processes and revolutionize financial transactions. The ability of these technologies to digitize transaction workflows, increase transparency and build trust could enhance the use of Supply Chain Finance (SCF) for Logistics Service Providers (LSPs). Therefore, the purpose of this paper is to investigate the application of blockchain technology (BCT) and in particular smart contracts to existing SCF solutions offered by LSPs. Inventory financing and status based receivable financing (SBRF) are introduced as SCF solutions that can be optimized by BCT. The paper highlights the potentials and limitations of blockchain for the two SCF use cases. In case of inventory financing, blockchain enables LSPs to offer a multi-funder inventory financing model based on transparent, immutable and distributed information about inventory as well as customers’ transaction history. Through blockchain-based activity registries, warehouse receipt data is automatically verified by a smart contract and the risk of fraud or double-financing can be mitigated. In case of SBRF, by combining blockchain with smart sensors tracking the physical supply chain flow, LSPs could become providers of a blockchain-driven SBRF service that distributes a transparent and validated supply chain status to all network members. The immediate availability of invoice information together with the increased supply chain visibility enables financiers to offer new and more attractive receivables financing services earlier in the supply process and at lower risk. Nevertheless, blockchain is still an emerging technology and there are challenges to overcome before it will be adopted on a wider scale.