A Huge market opportunity

SCF is a big area of business for banks and other major financial institutions, but the way they offer this service is rapidly changing. Increasingly, they’re losing market share to fintech firms and other lenders with more innovative SCF models.

For example, dynamic discounting services, P2P (peer-to-peer) lending websites and challenger banks are developing technological solutions that improve the efficiency of payables, receivables and other types of cash transactions. And as investors and consumers continue to back these innovations, the supply chain finance market will evolve significantly in the coming years.

Businesses are also increasingly looking for financial solutions to help their supply chains recover from the adverse effects of the coronavirus pandemic. In particular, there’s an onus on fintech companies to meet their ESG responsibilities by supporting firms that have experienced supply chain disruption over the past year.

Traditional banks and financial institutions are being forced to digitally transform and modernize their supply chain finance offerings. Although that requires significant time and investment, it’s a unique opportunity for banks to capitalize on the gains of an exciting new industry.

Due to this changing market, traditional banks and financial institutions – many of which still rely heavily on legacy technologies – are being forced to digitally transform and modernize their supply chain finance offerings. Although that requires significant time and investment, it’s a unique opportunity for banks to capitalize on the gains of an exciting new industry.

Ultimately, the rise of new innovations in the supply chain finance market provides benefits for both businesses and suppliers. However, they also meet the aims of the exchequer, procurement industry and commercial department. Moreover, banks will undoubtedly steal more market share from fintech companies by digitizing existing supply chain finance offerings.

CREDIFAX notes that the digitalization of the supply chain finance process is a trend with increasing weight in the priorities of the banks and corporates. Therefore, we are collaborating with multiple entities to implement and modernize their systems to offer a more digitized supply chain finance service.