Supply chain finance, a new paradigm is needed

Fintech is on its way to becoming a reality.

This is an inevitable result of the development of fintech, and also an inherent requirement of the development of digital economy. In this context, how to better empower the industrial chain and supply chain by means of finance has become a new choice for more and more fintech players.

The 2022 Chief Insight Report on China’s Fintech Enterprises, jointly released by KPMG China and the Fintech Development and Research Committee of the Internet Finance Association of China, predicts ten trends in the future of fintech. One of the major trends shows that digital supply chain finance has become the most favored blue ocean application field for fintech companies, accounting for 53%, and 23% of the surveyed enterprises regard it as their first choice.

With this kind of data, it is very clear that supply chain fintech has become the new port of call for fintech companies. How to create a new financial paradigm that ADAPTS to the current industrial chain and supply chain needs, how to make finance better contribute to the development of the real economy, and how to become a breakthrough to invigorate finance and economy?

However, at least from the current development situation, the traditional sense of supply chain finance model, can not meet the needs of the industrial chain and supply chain. Whether it is the lack of the ability of the “chain owner” enterprises or the complexity of the industrial chain supply chain, we can obviously feel that the traditional supply chain finance system is encountering more and more bottlenecks. How to create a new paradigm of supply chain finance that combines technology, industry and finance through the evolution of traditional supply chain finance, and find the combination point of high-level cycle of technology, industry and finance, has become the key to break the bottleneck of the development of traditional supply chain finance.

Paradigm one: technology, supply chain and finance

Throughout the current supply chain finance players, either focus on finance or supply chain players, few players can achieve a perfect integration of supply chain, finance and technology. This development mode of caring for one thing and losing the other eventually brings the development of supply chain finance into an unbalanced state of development. In the long run, the development of supply chain finance is bound to fall into a dead end.

The author believes that the nature of supply chain fintech determines that the player must be a “generalist” who is not only proficient in supply chain, but also understands finance, and also deeply cultivates technology to help industry digitalization. Only in this way can it really understand what kind of financial services are needed at the end of the supply chain, and it can find the right way and method to empower the supply chain with finance. If we are looking for a new paradigm of supply chain finance, the players who combine the characteristics of supply chain, finance and technology, especially those who are long-term players, may be the first ones.

After long-term cultivation at the supply chain end, supply chain fintech also continuously strengthens its product design ability, whole-process risk control ability and intelligent operation ability with the help of cloud computing, machine learning, privacy computing, industry knowledge graph and other cloud technology accumulation.

It can be said that supply chain fintech has made us see a new development paradigm that combines supply chain, finance and technology. Only with the help of such a new paradigm can we perfectly connect the three elements of finance, technology and supply chain; Only with the help of such a new way can we get rid of the unbalanced development of supply chain finance in the traditional sense, and finally enable finance, technology and supply chain to achieve high-level operation and build a perfect closed loop of industrial Internet.

Paradigm 2: Meet the needs of individual, multi-scenario

Supply chain finance is not exclusive to one industry or some industries. It must be able to meet the needs of different industries, different users and different scenarios. Only in this way can finance truly return to the entity and empower the entity. One of the most important reasons why traditional supply chain finance encounters so many bottlenecks is that it only uses a single product to supply diversified users, which ultimately makes the financial demand of the supply chain unable to be accurately satisfied like “drip irrigation”, let alone universal benefits.

When we explore the new paradigm of supply chain finance, it is necessary to meet the needs of personalized and multi-scenario as the top priority to solve. It can be predicted that in the future, the players who can really make a difference in the supply chain finance industry must be those who can really provide refined and precise financial services to the massive supply chain industry chain enterprises.

Through supply chain fintech, we can also see its exploration and practice in this aspect. The supply chain fintech platform covers the “double Ten model” of ten major supply chain finance business system platforms and ten digital supply chain service systems. Take ten supply chain finance business system platforms as an example, including factoring financing system, credit flow system, procurement financing system, movable property financing system, warehouse receipt financing system, bill financing system, credit financing system, financial leasing system, credit technology support system, payment and settlement support system, etc.

Only by meeting the needs of individual and multiple scenarios and realizing the precise supply of different types of users, can supply chain finance get rid of the extensive development mode of flood irrigation in the traditional sense and truly enter the precise development mode of drip irrigation. It can be said that the exploration and practice of supply chain fintech on the new paradigm of supply chain finance has opened a brand new way of thinking for us.

Paradigm 3: Make ecology bigger, realize fission

In essence, supply chain finance is a huge ecosystem. In such an ecosystem, there are not only “chain owners” composed of core enterprises, but also upstream suppliers, downstream distributors and retailers. Therefore, in order to do a good job in supply chain finance and create a new paradigm of supply chain finance, it is necessary to break away from the traditional development mode dominated by core enterprises and construct a huge ecology by including many relevant parties, so as to create a multi-collaborative ecology, and finally achieve fission.

Also, taking supply chain fintech as an example, based on the advantages of digitalized supply chain, it deeply links core enterprises, financial institutions and other subjects to form a symbiotic and win-win supply chain finance industry ecology. In such an ecosystem, there is no primary and secondary distinction between different individuals, and each individual is an organic part of supply chain finance. With such ecology, supply chain fintech creates a decentralized existence for us in a real sense and achieves multi-collaborative ecological fission.

For supply chain finance, such an ecology explored by supply chain fintech has to be a good attempt. After such an attempt, we will think about how to realize ecological fission from the mechanism, and finally make supply chain finance become an existence that benefits every detail of the industrial chain and supply chain, rather than an existence that only stays at a certain level. Only in this way can the development of supply chain finance completely break out of the previous development mode dominated by platforms and centers and truly enter a state of decentralized development.

Paradigm four: A strong and intelligent risk control system

Any financial species, any kind of financial model, must be based on risk control. In a sense, to do finance is to do risk control. When we are exploring the new paradigm of supply chain finance, it is the key to build a strong and intelligent risk control system to ensure the stable and long-term operation of supply chain finance. It can be said that without a powerful and intelligent risk control system, even a new supply chain finance model will be overshadowed.

For every player who tries to make a difference in the field of supply chain finance, it is the key to determine whether it has grasped the evolution of supply chain finance to find a risk control mode that is suitable for itself and can give full play to its greatest advantages. Specifically, the core value of the supply chain fintech platform is to assist, support and improve the compliance of financial business, better identify credit risks and operational risks, and improve efficiency, experience and asset scale through the dual-wheel drive of risk control and operation, supported by technology.

It can be seen that a powerful and intelligent risk control system not only effectively ensures the fast and efficient operation of supply chain finance, but also ensures the safety and stability of finance itself. For supply chain finance, this is the most critical, the most worthy of our attention and thinking.

Write at the end

Fintech is on its way to becoming a reality.

Supply chain fintech is undoubtedly the inevitable path and important means for fintech players to achieve “reality”. However, for a long time, the bottleneck of supply chain finance itself has finally restricted its development, making it unable to assume the function and role of connecting the upstream and downstream of the industrial chain and supply chain, let alone realize the high-level cycle of science and technology, industry and finance.

In this context, the market calls for the emergence of a new paradigm of supply chain finance.

In this new paradigm, players should not only be supply chain, finance, technology, but also be able to meet the needs of individual, multi-scenario; It is not only necessary to build a huge ecological system, but also to build a set of powerful and intelligent risk control system. The exploration and practice of supply chain fintech provide us with a model and direction. Starting from this, we may be able to open the new skylight of supply chain fintech and enter the new blue ocean of fintech.

 

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