The pandemic, subsequent supply chain shortages and the escalation of the Russian/Ukraine conflict followed by the war in Gaza, have refocused attention on supply chain resilience.
Globalization – followed by a certain degree of deglobalization – have completely changed the rules. The whole concept of supply chain management has morphed into a focus on how to be resilient; on the capacity to avoid or mitigate the impact of disruption, as well as related risks and costs. Speed, security, cost and resilience are now the key criteria for an efficient (financial) supply chain. So how from a treasury perspective can we build supply chain resilience?
As always, the answer is technology – by automating and digitizing processes – and the good news, there are smart solutions out there to help.
The current landscape
Globalization is complicated and variable; the world’s largest economies (i.e. US, EU & China) are locked in an escalating tripartite tariff war; the UK left the EU; COVID saw unprecedented disruption to the flow of goods around the world and national security and decarbonization have emerged as priorities in stark competition with free trade. The winds of change are blowing through the global trading system. The United States tries to be more resilient, to ensure that the supply chain is robust and continues to deliver energy, food and consumer products around the world. Increasingly “resilience” means capacity to withstand climate shocks such as floods and tornados. In this complex, fast-moving and politically sensitive environment, time is money and efficiency is a “must.” This means automating manual, slow and inefficient processes and where technology comes to the CFO and Treasurer’s rescue.
Trade finance automation
Automating trade finance processes can empower treasury, through better visibility and control of liquidity. With centralized bank guarantee management and credit utilization and structured, global control of document exchange across subsidiaries and trading counterparts, technology enables clear workflows, standardized data reliability and real-time, secure accessibility across multiple regions. As a result, treasurers can improve productivity, streamline their operations and focus on growth and efficiency. Surecomp’s collaborative trade finance solution RIVO™ offers automated guarantee tracking with real-time bank connectivity and full visibility of credit lines across multiple financiers. To build resilience across the whole supply chain, to accelerate guarantee issuance, to scale-up operations and drive global trade growth, the trade finance process must be digital.
The trade finance digital transformation journey
To remain competitive, companies must embark on this digital trade finance journey, and the message is clear, just get started. Review your pain points; manual, paper-based processes, guarantee issuance delays, complex workflows with multiple parties, lack of control, operational risk and supply chain friction – and set your goals; digital document exchange, global visibility of liquidity, fast on-boarding of a cost-effective solution, real-time bank communication and improved trade relations.
Regulatory frameworks are supporting digital trade finance
As international trade remains the lifeblood of the modern economy, regulators and international bodies such as the International Chamber of Commerce (ICC) are working hard to mandate more fluid, frictionless trade. For example, the passage last year of the Electronic Trade Documents Act – the ETDA which now allows the same legal recognition as their paper equivalents of electronic trade documents such as bills of lading and bills of exchange. It is anticipated this will help save billions in lost revenue due to the ongoing use of paper documents. The so-called Model Law on Electronic Transferable Records – MLETR – is a uniform model law that has been adopted by the United Nations Commission on International Trade Law (UNCITRAL) in 2017. Its scope is to allow the use of transferable documents and instruments in electronic form which typically include bills of lading, warehouse receipts, bills of exchange, promissory notes and cheques required to secure the delivery and payment of goods. While electronic document possession and exchange was always contentious, determining who has ownership and control over tangible goods, MLETR addressed this legal gap.
Supported by these legal frameworks, the true value of Surecomp’s RIVO™ stands strong in its mission to enable seamless, sustainable trade for companies of every size. The ability to bring all transaction parties together – the importer, the exporter, the shipping company, the issuing bank, the beneficiary bank, the compliance checks, the KYC – to communicate in real-time across one single platform is removing barriers, both literal and metaphorical. A rapidly growing network of banks joining RIVO™ is fostering ecosystem collaboration, centralizing bank guarantee management and optimizing efficiency like never before.
So the time to build supply chain resilience and allow Treasury to add even more value to the business is now – just get started. Choose a handful of digital-first key banking partners and invite them to join you in onboarding RIVO™ to drive resilience, better funding and trade growth.
François Masquelier, CEO of Simply Treasury – Luxembourg
