Supply Chain Financing: When the Banks Go to War, CFOs Could Be Winners

by Steve Murphy 0

This starts off as a promising piece on possible intrigue vis-à-vis product wars between banks, with hints of behind-the-scenes details surrounding a recent big deal win. It turns out that it’s a nice, sober overview of how institutions (in this case most specifically citing ANZ) are leading with supply chain finance capabilities as a way to break further into the potentially lucrative APac market. The article is targeted at CFOs/Treasurers, who are most often the intended target of bank revenue generators when it comes to trade and cash management solutions. As most everyone knows the APac region has experienced tremendous growth in inter and intra-regional trade flows during the past 10 years. The author goes on to make the point that many banks are trying to expand their share, and SCF is a logical arrow in the quiver. However, things are not always what they seem; or better said, banks can’t always deliver what they say they can, regarding end-to-end solutions.

This does not stop banks from talking up their “innovative supply chain solutions,” even though only a fraction of customers have been offered them, and they are rarely tailored for individual corporate use. The other issue is that many banks offer only part of the supply chain, and leave big gaps elsewhere. What is a CFO to do in plugging these gaps but to go to another bank, which totally invalidates any claim from banks on delivering “end to end supply chain solutions.”

The article goes on to offer testimony as to why decision-makers need to be cautious and diligent when considering solutions. There are some practical advice points offered to CFOs as to considerations in both the sales cycle as well as the nuts and bolts of gaining a grasp of the actual supply chain process and participants.

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

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