11 Aug 2022
The transformative impact of the pandemic continues to be felt in the form of a rapidly increasing rate of digitisation and customer expectations. But where specifically are companies seeking the best return on their investment in innovation?
“Almost one in three large corporates globally failed to nominate any bank as a leader for supply chain funding sustainability.”
Supply chains are a key area of concern and uncertainty – and headlines.
Across the industry and in financial services, there is a high level of consternation the confluence of multiple geopolitical, macroeconomic, and pandemic related factors will continue to prevent global logistics players, shipping companies and port operators to clear the growing backlog and keep up with sharply increasing consumer and business supply chain demands.
Companies though are investing in digital innovation.
According to East & Partners latest Global Insight Report “Digitising and Greening Global Supply Chains”, a mere 2 per cent of chief financial officers and corporate treasurers have failed to implement technology, or ruled out planning to, such as cloud computing to improve resilience and efficiency in their supply chain, internet-of-things (IoT), artificial intelligence (AI), Blockchain/distributed ledger technology (DLT) and automation.
The majority of those enterprises are based in the Asia region.
The Supply Chains report outlines what digital technologies corporates are implementing to improve resilience and efficiency in their supply chain but also, importantly, what is the most important digital functionality supply chain partners have requested but do not currently have access to.
East’s analysis asked whether banks are investing enough in “voice of the customer” led product and service enhancements or simply attempting the highly risky “build it and they will come” approach to innovation.
“We’re getting a lot of demand for a receivable financing platform to help digitise what are stretched shipment/delivery times and late payments happening as a result. Actively looking at getting something in place for our partners by year’s end but it needs to be fully digitised.”
Group Treasurer, US$20Bn, German Light assembler
Corporates are voting with their feet when it comes to supply chain sustainability. The research outlines the enormous opportunity for both incumbent banks and challengers to offer a clear point of distinction based on their unique environmental, social and governance (ESG) credentials.
The incentive is more than simply retaining or acquiring new commercial banking customers.
Corporate treasurers are switching in the event their bank cannot support their ambitious sustainable financing implementation plans across their own operations and up and down their complex cross-border supply chain partners.
Our research found internal issues include the absence of a defined strategic plan, lack of board support or simply being too busy responding to COVID.
External issues include the challenging regulatory framework, public relations concerns and lack of shareholder/investor demand while a lack of stringent definitions/agreed measures and poor supply chain partner compliance also complicates integration and adoption of sustainability principles.
Crucially for the finance sector, almost one in three large corporates globally failed to nominate any bank as a leader for supply chain funding sustainability (31.4 per cent). Similarly, one in five corporates could not recall any bank or financial services provider as a stand out pace-setter for digital innovation relating to cloud computing, IoT, AI, DLT, automation or other technology (18.4 per cent).
“We had already been investing in getting our supply chain processes
properly integrated with our own ERP platform but mostly on our own;
our bank hasn’t been that well equipped to help which has been disappointing.”
Corporate Treasurer, US$5.0Bn, UK Importer Distributor
The voice of the customer insights provide a clear line of sight across differing funding methods, key trade and supply chain finance (SCF) providers, domestic and international volumes and the challenges and opportunities faced by the largest corporates in funding their global supply chain needs amid crippling supply chain disruptions and geopolitical threats.
About East & Partners research
The latest 2022 analysis provides powerful comparisons against 2017 equivalents captured as part of East & Partners Funding a Globalised Supply Chain Global Insight report.
The analysis is based on primary research executed by East & Partners with the Top 100 revenue ranked corporates in each of eight key global markets targeted for interview.
All interviewees reported an active import and/or export function with operations headquartered in Australia, Canada, China, Germany, Hong Kong, Singapore, United Kingdom, and USA.
“The better our supply chain visibility, the better our ability to
manage things, including its funding. We’ve been investing for
two years and are getting close to almost real time.”
- Treasurer, US$15Bn USA Wholesale Distributor
Martin Smith is Global Head of Markets Analysis, East & Partners
East & Partners is a leading specialist business banking market research and analysis ﬁrm. The firm’s core expertise is in the provision of analysis and advisory services tailored for the commercial, business and institutional banking markets across Asia Pacific, Australasia, Europe and North America.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
11 Aug 2022
19 Apr 2022