The AITE-Novarica report “Innovation in Supply Chain Finance” analyzes why fintech providers should reengineer their Supply Chain Finance (SCF) platforms and make them more bank-friendly to better serve both corporate professionals and financial institutions.
The report focuses on the future of the SCF market, which will be characterized by a platform approach i.e., “platformization”. In the new generation of SCF platforms, bank-friendly offerings will prevail, serving both banks and their corporate clients by strengthening relationships and improving collaboration. Financial institutions will also have the opportunity to integrate innovative products that cover the entire SCF lifecycle as a trusted service partner. This will support the desire of financial institutions to maintain a direct and close working relationship with their customers, contributing to the stability of these relationships.
“Working with bank-friendly SCF platforms gives banks a great opportunity to offer automated and fully digital products to a new group of customers: namely, the suppliers of their corporate customers, often small or medium-sized enterprises (SMEs),” explains Enrico Camerinelli, Strategic Advisor at AITE-Novarica Group. “This is an opportunity to offer products and services to a large network of additional business partners. Thus, SCF offers growth potential in unprecedented dimensions.”
AITE-Novarica emphasized that innovative platforms shape cloud-based ecosystems of “best-of-breed” products with flexible partners. These services extend the capabilities of “established” SCF platforms and enable Treasury and Finance teams to optimally manage their Working Capital.
Bank-friendly platforms such as Traxpay make it possible for banks to extend their offerings in Working Capital Management and Supply Chain Financing with an innovative platform solution. In this way, products are offered and combined in a completely new manner, as complementary solutions to SCF programs. For example, Traxpay integrates traditional banking services such as (digital) guarantees, virtual credit cards or foreign exchange onto the platform, providing a seamless experience for both the corporate buyer and the supplier.
Enterprises are rejecting mono-bank SCF programs, choosing instead flexible platform solutions. But not all scheme providers are following the same strategy. Some of the incumbent SCF platforms are disintermediating banks, who, over time, lose client intimacy. Financial institutions need to act now and play an active role in determining which of the platform(s) should prevail in the market. “By channeling their business to Traxpay, a multi-bank, yet bank-friendly solution, financial institutions can support a new market standard. Through its focus on partnerships Traxpay becomes an extension of the bank itself, a global platform that offers key products and services to its customers, i.e., corporate buyers and their suppliers. This will, in turn, support strong relationships between a bank and its client in the SCF area and beyond,” explains Markus Rupprecht, CEO of Traxpay.
In the report, AITE-Novarica describes all of the key factors and prerequisites for such a platform, whose ecosystem offers versatile benefits for financial institutions as well as for corporate customers and their suppliers.
You can download the full report here.
About AITE-Novarica Group
Aite-Novarica Group is an advisory firm providing mission-critical insights on technology, regulations, strategy, and operations to hundreds of banks, insurers, payments providers, and investment firms—as well as the technology and service providers that support them.
Comprising former senior technology, strategy, and operations executives as well as experienced researchers and consultants, our experts provide actionable advice to our client base, leveraging deep insights developed via our extensive network of clients and other industry contacts.