Financial Supply Chain Management

Relevant Advanced Technologies for Trade and Supply Chain Finance

© Commerzbank

A new industry report titled »Relevant Advanced Technologies for Trade and Supply Chain Finance« launched by Commerzbank, in partnership with the Fraunhofer Institute for Material Flow and Logistics (IML), reveals that the trade and supply chain finance industries are at a turning point, with emerging technologies and the increasing volume of accessible data setting in motion the rapid evolution of new ecosystems.

Combining the expertise of application-oriented scientists from Fraunhofer IML with trade finance specialists at Commerzbank, the paper underpins the bank’s commitment to shape the trade finance business of the future. The joint research effort shows that digital advancements are pushing the development of improved business models to meet the need for increased operational efficiency and alignment with more complex sustainability goals.

The report identifies the key innovations that are forming the building blocks of the new trade finance ecosystems, including: Big Data and Artificial Intelligence (AI), Blockchain, Distributed Ledger Technology (DLT), smart contracts, Internet of Things (IoT) and sensorics.

Framework SCF and Smart Finance

Framework SCF and Smart Finance
© Fraunhofer IML
Framework SCF and Smart Finance

The Situation:

  • Increasing pressure for suppliers to meet (short-term) liquidity requirements with a lack of access to capital at the same time
  • Increasing producer (OEM) requirements and conditions for suppliers and sup-suppliers
  • Latest Regulations (e.g. Basel III) increase the financial costs, because of higher credit-worthiness and risk classification
  • Frequent imbalance between available financial needs and expected finance costs: companies with higher financial needs face higher financial cost

Our Solution:

  • Integrated management of commodity and financial flows along the supply chain with systematic integration of financial service providers
  • Long term goal: improvement of the financial access, decrease the costs and risks of financing, reduction of working capital, decreasing the supplier risks
  • These approaches are especially for SME’s of great importance

Your Benefit:

  • Strengthening of the supply chain through win-win situations for all parties:
    • Producer: security of supply, reducing the supplier risks
    • Supplier: supply ability, reducing financing risks, increase the ability to staY competitive
    • Financial service provider: transparent supply chain, reduction of margin risks, new business models