Expanding Supply Chain Finance: A New Approach to Revenue Gains

MINNEAPOLIS--(BUSINESS WIRE)--In classic supply chain finance (SCF) programs, multiple conditions can disqualify more than 85% of suppliers from participating in the program, denying banks the opportunities to deepen relationships with corporate customers and to provide much-needed financing to the supply chain. Within the highly competitive SCF space, banks must find a way to provide access to more suppliers and meet customers’ needs in a cost-effective manner. Using the SCF program tactics shared by Syncada from Visa, banks can increase customer satisfaction and expand relationships with buyers and suppliers.

“A new approach can give banks an edge in supply chain finance, allowing them to fully realize revenue potential in new or existing buyer programs”

Historically, there are several reasons that banks limit the suppliers eligible for SCF programs. The high cost of enrolling suppliers, including credit limitations, labor-intensive contracting processes, legal fees, and limited transaction flow, reduce SCF profitability. Without access to SCF, these non-eligible suppliers often seek expensive alternate solutions, such as factoring, which are reflected ultimately in a higher unit price to the buyer.

“A new approach can give banks an edge in supply chain finance, allowing them to fully realize revenue potential in new or existing buyer programs,” explains John Holtan, Product Director for Supply Chain Finance at Syncada. “Maximizing working capital is essential in today’s marketplace. Banks that provide a comprehensive suite of SCF solutions across a buyer’s entire supplier base will retain existing customers and acquire new ones.”

With new technology, banks can extend their supply chain finance options to onboard more suppliers, especially those with critical working capital needs. To learn more, join Syncada and Trade Finance Magazine on Thursday, September 27, for a live webinar, titled “Grabbing Supply Chain Finance by Its Tail”. To register, click here or visit www.syncada.com/educationandresources.aspx and select “Webinars”.

About Syncada

Syncada from Visa provides a B2B network for financial institutions to enable clients to increase control over their financial supply chains, regardless of language or currency. Financial institutions use Syncada to deliver standardized invoice processing and payment with integrated financing to their corporate and government clients. Syncada processes millions of invoices for buyers and makes payments to tens of thousands of suppliers in 47 countries. In 2011, Syncada processed more than USD $21 billion in payments. Visit www.syncada.com for more information.