World’s Best Supply Chain Finance Providers 2017

Supply chain finance is dominated by large global banks, yet developing regions are nurturing some challengers, and growing complexity is bringing nonbank investors into the picture.

Supply chain finance (SCF) is attracting investment and interest from financial technology companies that are leveraging cloud-based technologies and the Internet to provide buyers and suppliers with greater choice when it comes to selling their payables and receivables in order to receive early payment in return for discounts. With second- and third-tier suppliers still missing out on some of the benefits of SCF, as buyer-initiated programs tend to engage more with top-tier suppliers, a lot more work could be done by both finance and technology providers to spread the benefits of SCF to these lower tiers.

Having said that, SCF still remains the preserve of only a handful of large global trade banks, with some challenger banks emerging in developing regions of the world. These challenger banks boast relationships with small and medium-size companies in these markets and therefore may have a better chance of identifying opportunities to serve these customers with enhanced working capital finance, either before or after the invoice approval process. A number of banks are still offering SCF post-invoice approval, but the opportunity to really transform corporate supply chains may come even before a purchase takes place or is approved by the buyer. For example, suppliers may need to buy inventory earlier in order to meet seasonal spikes in demand, or may want to defer buying inventory until later. There are still few finance providers that have the expertise to handle inventory financing.

One good thing that has come out of the last few years is the recognition that few banks are able to finance complex, cross-border SCF programs on their own. A number of nonbank, third–party investors (asset managers, private equity, hedge funds) are now seen as essential investors to have on board in order to finance programs as they grow in size and complexity. This year’s SCF winners recognize those companies that are paving the way for innovation in the SCF space, or that continue to scale and grow their SCF programs, despite increasing competition from nontraditional players in this space.

Best Supply Chain Finance Providers 2017
Global Winners
Best Supply Chain Finance Provider – Bank	Citi
Best Supply Chain Finance Provider – Nonbank	Orbian
Best Customer Implementations of a Supply Chain Financing Solution	BNP Paribas Supplier Credit Financing Deutsche Bank and Jumbo Supermarkten PrimeRevenue and AGCO
Best Platform Connecting Buyers, Suppliers and Financial Institutions	PrimeRevenue
Best E-Procurement	SAP Ariba
Best Analytics for Credit Scoring and Supplier Risk Assessment	Dun & Bradstreet
Best Invoice Discount Management	SAP Ariba
Best Integrated Trade, Supply Chain Finance and Cash Management Solutions	Citi
Best Web-Based Supply Chain Financing Solution	Basware
Best Pre-Shipment Financing Solution	BNP Paribas
Regional Winners
North America	Citi
Western Europe	BBVA
Central & Eastern Europe	ING
Nordic Region	Danske Bank
Latin America	Santander
Caribbean	Citi
Asia-Pacific	DBS Bank
Africa	Standard Chartered
Middle East	Abu Dhabi Commercial Bank

A consistent winner in this category, Citi boasts one of the most comprehensive supply chain finance offerings of the global banks and has an unrivaled global presence in more than 70 markets across North America, Latin America, Asia, Europe, the Middle East and Africa. SCF is part of the bank’s Treasury & Trade Solutions group, which saw continued growth in transaction volumes in 2016. Recent enhancements to its solutions include an automated Web-based supplier acquisition platform to streamline the supplier onboarding process. Clients looking to execute global cross-border SCF programs can rely on Citi’s local and regional market expertise. In addition to financing SCF programs itself, Citi’s Trade Risk Distribution team distributes SCF assets to a network of investors globally, a capability it is able to leverage to support the ongoing growth of a client’s SCF program.

Orbian is one of the longest-established players in the SCF space, with more than 15 years of experience in providing SCF solutions to the world’s largest manufacturing, consumer products and retail companies and their suppliers. Orbian’s platform, which sells SCF financing notes to investors, has remained a mainstay of the SCF industry. The industry is undergoing rapid change due to the entrance of financial technology companies into the trade and supply chain finance space. Last year saw Orbian open new offices in Munich, Germany, and San Diego and issue $8 billion in financing notes.

Supplier finance delivers working capital efficiencies for both buyers and suppliers, but when it is tied to “green” credentials such as a client’s sustainability goals, it can be even more powerful. To finance trade in green lighting technologies, BNP Paribas provided a one-off €16.6 million ($17.8 million) facility to discount sets of invoices due by two consortia to which the bank’s client provided LED lighting equipment for a lighting-renewal project in Madrid.

Sometimes noteworthy SCF deals are more about the sheer scale and size of a program. In the case of Netherlands retailer Jumbo Supermarkten’s SCF program, the company needed to process 40,000 invoices a week—rather than the usual 400 or so—and it also needed to incorporate three partner banks in addition to Deutsche Bank. To accommodate Jumbo Supermarkten’s invoice processing needs,  Deutsche Bank bundled invoices into “packets” by maturity date at the point of transmission and then uncompressed them as they entered Deutsche Bank’s system, retaining their full information content for further processing, payment and reconciliation. Deutsche Bank also put in place an asset-based (factoring) finance facility for suppliers that bank with Deutsche Bank. This pays out on part of the invoice to the supplier even before the invoice is uploaded onto the buyer’s system, which means suppliers don’t need to wait for the invoice to be approved by the buyer.

Agricultural provider AGCO saw SCF as an opportunity to put itself in a more financially stable position than its competitors. It worked with PrimeRevenue to bring its SCF program online within a matter of months. So far, AGCO says it has generated about $20 million in working capital, in addition to over $100 million in direct material spending, which has been funneled through the program in less than a year. In addition to providing AGCO’s suppliers with low-cost capital, PrimeRevenue’s platform simplifies payment terms with suppliers in different locations.

Relying on the cloud to deliver supply chain finance services, PrimeRevenue’s platform is designed to make it easy for buyers, suppliers and financial institutions to interact with one another. With more than 20,000 clients and 50-plus financial institutions, PrimeRevenue says it processed $120 billion in transactions last year. PrimeRevenue has provided supply chain finance and dynamic discounting solutions since 2003, across multiple jurisdictions and more than 15 currencies.

SAP Ariba offers a wide range of cloud-based solutions that cover the entire source-to-settle process, enabling buyers and suppliers from more than two million businesses and 190 countries to discover new opportunities, collaborate on transactions and grow their relationships. Some of its procurement solutions include: Procure-to-Pay, for catalog and contract compliance; Procure-to-Order, to help make front-end procurement processes operate with maximum efficiency; Procurement Content, for fast catalog enablement; Services Procurement, which utilizes SAP Fieldglass for automated procurement and workforce management; and Invoice and Payment, to speed up the purchase-to-pay cycle.

Managing corporate supply chains is not just about smart procurement and how and when you pay your suppliers. Credit scoring of suppliers and business analytics is essential to companies to help them minimize the effects of major disruptions (natural disasters, suppliers unable to deliver goods) in their supply chain. Dun & Bradstreet provides credit and risk management analytics that facilitate supply chain optimization and that help prevent business disruptions. Information on risk conditions, business profiles, financial indicators and the competitive landscape is provided on a software-as-a-service basis by Dun & Bradstreet.

Companies can leverage SAP Ariba’s Invoice Management and Discount Professional software to fully automate the process of offering, negotiating and agreeing on early payment terms. Discount Professional, which is delivered as a Cloud-based solution within the Ariba Network, gives buyers the option to pay invoices ahead of time to capture discounts. The solution can be integrated with any enterprise resource planning platform to provide companies with a payment status and dynamic-discounting portal.

As part of Citi’s Treasury & Trade Solutions group, SCF is viewed within the integrated framework of Citi’s trade and cash management businesses. Citi’s Supplier Finance platform is integrated with its global cross-currency payment capability. Supplier Finance also leverages the CitiDirect BE online banking platform, which provides a single, centralized point of Web-based access to a full range of global treasury-and-trade solutions.

Basware claims to have one of the largest open business networks in the world. It connects one million businesses in more than 100 countries and territories around the globe, enabling collaboration between buyers and suppliers of all sizes. It is best known for the ease with which its solutions enable Fortune 500 companies to automate the order-to-cash process, including enterprise e-invoicing, e-procurement and payment, so they can get paid earlier and more efficiently as dispute resolution and management are simplified. Like most vendors in this space, Basware has made the transition to Cloud-based technologies to facilitate greater buyer-supplier collaboration. Once connected to its network, buyers and suppliers can access a wide range of solutions centered around automation of invoices and payment, invoice discount management, procurement and supplier-initiated early payment.

The French bank’s wholly owned trading company, Utexam, based in Dublin, buys, holds and sells a wide variety of inventories for BNP Paribas’s customers needing to improve working capital and cash flow efficiency. Utexam customers encompass the retail, electric components, automotive, computers, agricultural products, steel, food beverages and healthcare sectors. BNP Paribas is one of the few banks in the trade and SCF space to boast such a specialized subsidiary, which helps companies buy inventory when market pricing is more attractive, they want to buy in bulk to achieve greater economies of scale, or short-term inventory needs transpire. Ownership of inventory by clients can be deferred until they need it or can be sold instantly on extended payment terms.

Citi has more than 15 years of experience in SCF and hosts SCF programs for a number of leading corporate names in North America across the aerospace, pharmaceutical and retail sectors. With its focus on supplier acquisition and engagement, which is essential for the success of SCF programs, the bank has supplier-acquisition teams based in New York as well as elsewhere. Clients in North America also benefit from the bank’s global expertise in arranging programs and its ability to draw upon a network of investors to fund SCF assets.

The Spanish market is one of the most developed markets for SCF solutions. The terms “confirming” or “reverse factoring” are used to describe the solutions offered by Spain’s BBVA, which has more than 20 years’ experience of offering this product. The bank runs more than 2,400 SCF programs and has active client-buyers located in Austria, Belgium, Cyprus, Denmark, France, Germany, Greece, Ireland, Italy, Lichtenstein and Luxembourg. BBVA provides a dedicated website for suppliers, and there is no need to open an account with the bank in order to participate. BBVA focuses on serving not only large suppliers but also small and medium-sized companies that are most in need of financing.

In Central and Eastern Europe, most of ING’s supply chain finance deals encompass markets such as Poland, Hungary, Turkey and Romania. SCF is part of the bank’s Working Capital Solutions Group, which was established in 2012. It has developed pan-European SCF programs and onboarded 500 suppliers, in countries such as Poland, for transportation company TNT. ING also seeks to differentiate itself in the marketplace by bringing in third-party funders (both banks and nonbanks). ING has developed a Cloud-based tool to expedite the supplier-onboarding process.

Danske Bank has a number of domestic SCF programs implemented in the Nordics, a portion of which also include multicountry/multicurrency programs. With supplier adoption being key to the success of any SCF program, Danske Bank focuses on lowering the barriers to entry for suppliers and minimizing the changes they need to make to their existing practices. There are very few technical requirements for suppliers to participate in the SCF program. The current invoice process remains unchanged. Quantitative analysis and scoring of individual suppliers is used to optimize the onboarding process. A supplier can view all of its approved invoices in the SCF module in Danske Bank’s Web-based Business Online. The supplier can either cherry-pick which invoices to discount or opt for automatic discounting.

The Spanish bank has offered confirming or SCF programs based on reverse factoring (approved payables) for more than 20 years in the Latin American region. It plays a key role in providing structured financing facilities for airlines in the region, to help finance their fleet acquisition programs.

Citi’s Caribbean customers benefit from a globally consistent supplier platform, which leverages the bank’s online technology, CitiDirect BE, providing access to a wide range of treasury and trade solutions. It also boasts an on-the-ground footprint in several countries throughout the region to support clients’ trade and supply chain finance needs.

DBS offers SCF across all of the core markets in which it operates in Asia (Singapore, India, Indonesia, China, Hong Kong and Taiwan). DBS leverages its Asian connectivity to help clients roll out SCF programs. The bank provides accounts receivable purchase and buyer finance as well as supplier finance based on payables. It also provides a dealer finance program, for reaching further into a company’s tier of suppliers. The bank boasts multiple live domestic programs, as well as cross-border deals implemented across the Asia-Pacific region.

Based on its newly launched “banking the ecosystem” approach, Standard Chartered maintains that it is able to better service the working capital needs of buyers and suppliers and their networks of vendors and distributors in 15 markets in Africa where the bank boasts a direct presence. The bank boasts a fully automated Vendor PrePay platform in East and West Africa, and many other parts of the continent, to support its clients. Vendor PrePay enables small and medium-sized suppliers to leverage a large company’s existing relationship with Standard Chartered Bank to access more-affordable financing, while ensuring prompt settlement of invoices. In 2016, the bank won new SCF mandates in Ghana, Nigeria, South Africa and Kenya.

In addition to its trade finance business, ADCB provides invoice-based financing. As part of its open-account trade portfolio, the bank provides invoice-discounting services that cover preshipment and postshipment on both purchase and sales for the bank’s corporate and commercial clients. ADCB says its invoice-discount- management portfolio has experienced consistent growth of 25% over the last two years.