COVID-19 has been an eye-opener for all industries, economies, and even individuals. It has highlighted critical gaps and weaknesses in global supply chains.
The World Economic Forum is collaborating with leaders from the global supply chain and logistics industry, the world’s largest ports, blockchain start-ups, importers and exporters, civil society, and more than 20 governments to accelerate the use of blockchain responsibly and strategically across supply chains. The project is part of the World Economic Forum’s Shaping the Future of Technology Governance.
Globally, financiers are exploring partnerships with Fintech and IT companies to build visibility of the supply chain, embed it in their financing decision-making, and choose the right supply chain financing (SCF) technique for their customers. SCF offers distinctive advantages to both suppliers and buyers by providing much-needed liquidity to the supplier and improving the buyer’s working capital.
Blockchain, the digital record-keeping technology behind cryptocurrency networks, is a potential game changer in the financial world. But another area where it holds great promise is SCF. As digital transformation pledges to alleviate the friction in international trade and SCF techniques aim to bridge the credit gap in the trade ecosystem.
Though there are some concerns, be they systemic or legal, there is still a huge wave to push the needle towards a paradigm shift led by banks, Fintech/IT enablers, and governments towards the development and adoption of blockchain SCF platforms.
The need of the hour is to:
- Re-imagine SCF workflows with digital technologies to achieve seamless interoperability.
- Partner with ERP solution platforms that have standard integrations to close any gaps and make sure that all entities are capturing the same data at the same time.
- Leverage blockchain ledgers to build shareable ledgers for greater trust and transparency between supply chain participants and financial institutions.
Read our whitepaper to learn more about the opportunities offered by blockchain technology and how the application of blockchain technology can help overcome the barriers of SCF.