Partnering with Fintechs is Top SCF Budget Priority for Banks in 2019
APR 9, 2019 - 6:55 am
In an ever-evolving supply chain finance (SCF) industry, financial technology providers continue to disrupt the bank-led status quo and garner an increasing market share because of their flexible financing strategies according to a new survey by Strategic Treasurer and Kyriba.
“This second iteration of our SCF Survey, developed in partnership with Kyriba, sought to pinpoint the unique perspectives and strategies of organizations in the space, both from a provider and user standpoint,” said Craig Jeffery, founder and managing partner of Strategic Treasurer.
“The data shows fintechs continuing to drive change, with banks working hard to match the pace of innovation.”
“Our banking partners find that by using Kyriba’s supply chain finance technology they can deliver innovative liquidity and financing solutions to their customers quickly and effectively,” said Bob Stark, vice president of Strategy at Kyriba. “Partnering with Kyriba helps reduce IT expenses while also allowing for full integration between bank platforms and internal ERP systems.”
The 2019 Supply Chain Finance Survey found nearly half of banks are now using third party SCF platforms to service clients, and partnering with fintechs has been labeled as the top focus for banks regarding annual spend in SCF.
At the same time, maintaining a competitive edge against fintechs was a top challenge for 50 percent of banks and data shows fintechs only slightly lag banks in terms of SCF market share (34 percent of corporates used a bank SCF solution, 29 percent used a fintech solution).
KYC was listed as the top challenge for banks concerning their SCF line of business (77 percent). Suppliers registered KYC delays as the top challenge they anticipate during SCF onboarding (56 percent), and data shows that onboarding suppliers to a bank-led SCF solution takes longer than via a Fintech platform. As KYC requirements continue to beleaguer banks, fintechs gain a competitive advantage by offering shortened onboarding and “go live” timing.
Fifty two percent of corporates find themselves often or always in an excess cash position, and 32 percent indicate their position fluctuates between cash excess and cash deficit. This means that in times where corporates have excess cash, the ability to leverage dynamic discounting or other “self-funded” SCF options is a major advantage. With over half of corporate buyers (52 percent) and nearly half of suppliers (45 percent)willing to alter their SCF strategies as positions shift, vendors offering multiple finance options draw market appeal.
The 2019 Supply Chain Finance Survey, sponsored by Kyriba and conducted by Strategic Treasurer, ran for nearly eight weeks and captured the responses of approximately 150 treasury 150 treasury and finance practitioners.
Kyriba, a provider of SaaS solitions, is headquartered in San Diego, with offices in New York, Paris, London, Tokyo ,Dubai, and other major locations.
Atlanta based Strategic Treasurer provides consulting services for treasury management, security, technology and compliance.
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