Navigating the evolving SCF landscape with Taulia and ANZ

Supply chain finance solutions can help businesses build resilience in challenging times, and collaborations between banking institutions and FinTech companies are making those solutions easier to access than ever.

Since the pandemic, companies worldwide have faced significant challenges in obtaining the goods they need to do business. Product shortages, geopolitical conflict, and the impact of soaring inflation have all taken their toll on global supply chains.

To protect their businesses, many companies have opted to diversify their supplier bases or switch from a just-in-time to a just-in-case inventory model. However, more is needed if companies are to manage supply chain risks and achieve their business goals.

In this environment, technology has an increasingly important role to play in helping companies overcome supply chain challenges and address their evolving needs. As well as speeding up supplier onboarding and improving visibility across supply chain processes, sophisticated supply chain finance (SCF) platforms can also help businesses meet their sustainability goals by tracking their suppliers’ ESG ratings and incentivizing them to adopt more sustainable practices.

At the same time, banks and FinTech companies are working together to help corporates access the solutions they need, as illustrated by the strategic relationship announced by Taulia and ANZ, a leading bank in Australia, in May 2023.

This arrangement will provide ANZ clients with SCF and dynamic discounting solutions enabled by Taulia’s platform and technology. The main focus of the collaboration is on helping companies build more resilient and sustainable supply chains while giving suppliers access to cost-effective capital.

Transforming SCF with technology

Technology has had a transformative effect on supply chain finance over the last few years. For one thing, the rise of predictive technologies and artificial intelligence (AI) is opening up opportunities for businesses to use SCF more strategically, from monitoring suppliers' financial health to pinpointing the APR at which suppliers might accept early payments.

Meanwhile, the use of electronic invoices and automatic invoice data capture is helping companies speed up invoice handling, eliminate paper from AP processes, and reduce invoice processing costs and errors while also making it easier for suppliers to submit invoices. More efficient invoice processes can boost the benefits of an SCF or dynamic discounting program: the sooner invoices can be approved, the greater the opportunity for suppliers to access early payment discounts.

Technology also has an important role in helping companies leverage SCF to achieve their ESG goals. According to the WEF, emissions from suppliers throughout the supply chain can represent up to 70% of a firm’s total emissions. Companies have much to gain by adopting SCF platforms that can not only monitor suppliers’ sustainability metrics but also incentivize suppliers to adopt more sustainable practices through access to cost-effective financing.

As Jessica Iacobucci, Head of Trade & Supply Chain Sales, Australia & PNG, Institutional Banking at ANZ explains, “The increased focus around Scope 3 emissions, especially the provenance aspect of it, is an important part of the evolving supply chain finance space and has become a key agenda for our customers.”

Evolving business goals

Developing economic conditions, regulatory reforms, and concerns about sustainability are shaping the solutions companies need to adapt and thrive. Platforms like Taulia have an important role in helping companies navigate difficult market conditions.

Supporting suppliers with liquidity can mitigate the risk of disruptions and delays and help companies build stronger relationships with their business-critical suppliers. In particular, modern solutions that provide fast and simple onboarding for suppliers make it easier for companies to diversify and strengthen their supplier base.

However, to meet the demands of the current landscape, companies need access to comprehensive platforms that offer more than just financing tools. “Our clients are looking to build sophisticated supply chain platforms,” notes Mary Ng, Director, Head of Supply Chain Sales, North Asia at ANZ. “They’re not just seeking a financing tool but end-to-end solutions.”

Solutions like Taulia’s platform can give companies more visibility across their supply chains while helping them monitor their suppliers’ financial health. Armed with more data and better visibility, companies can gain a greater understanding of their supply chains and make more informed decisions.

Building resilient global supply chains

At the same time, companies are focusing on increasing supply chain resilience. As a result of their experiences over the last few years, companies are all too aware of the need to protect their businesses and supply chains from future crises. This means addressing the risk of numerous types of disruption, from rising raw material costs to logistical delays and geopolitical conflict.

“When it comes to supply chain finance, we absolutely are finding companies focusing on building supply chain resiliency and looking at it not so much as an opportunity to benefit only themselves, but as an efficient tool to deliver capital and finance into the ecosystem,” comments Steve Scott, Head of APAC at Taulia.

As companies continue to strengthen their supply chains, industry stakeholders need to work together to develop robust and sustainable global supply chains. With technology playing an increasingly important role in the SCF space, it’s no surprise that many banks are partnering with FinTechs to support their customers with sophisticated solutions.

Banks have much to gain by working with FinTechs to provide solutions that can help companies increase the resilience of their supply chains while addressing compliance needs and providing the insights companies need to make effective decisions.

As Ng explains, “We are collaborating with third-party entities – like FinTechs and AI companies – to provide solutions, not just on the finance side but also on the supply side to give clients the visibility and tracking capability they are looking for.”

The importance of mitigating supply chain risks has never been more apparent. Companies need access to solutions that can protect their businesses from the threat of future disruption – but at the same time, they are also paying close attention to the role SCF technology can play in helping them achieve their sustainability goals. Collaboration between banks and FinTechs will prove increasingly key in bringing corporates the technology they need to navigate this evolving landscape and achieve their goals.

To learn more about this topic, read ANZ’s recent report, The Future of the Global Supply Chain.