The banks are working hard to increase levels of automation and integrate financial transactions with the physical supply chain to help their corporate clients. Financial Supply Chain Management (FSCM) consists of services that combine the data and transactions which are the results of trade and payments activity. These services provides the parties like banks, corporates and technology vendors in the supply chain with all the information they need to effectively complete their business transactions. For every physical movement of goods between supplier and buyer, there exists a financial flow traveling in the opposite direction.
Supply chain services refers to the providing services in order to increase the efficiency of supply chain. Supply chain finance (SCF) provides the appropriate financing facilities at the relevant points in the physical supply chain. This helps in orderly making of payments and receipts with out damaging the relationships between the parties involved in the supply chain.
The benefits provided by the financial supply chain suppliers are, it enhances the relationship value with dealers and cash flow forecasting, it helps in effective management of the cash conversion cycle and unlock the working capital.
The benefits to the banks includes greater fee and fund based income, cross selling opportunities, enhancing the relationship value with suppliers and dealers.
Easy accessibility to low cost working capital, dynamic discounts, effective management of days payable outstanding, enhanced cash flow forecasting and relationship with customers are benefits provided by the FSCM to the dealers.
According to SWIFT's Conn, the biggest challenge to the development of FSCM as a profitable business line for banks is the number of parties involved and standardization will lead to greater adoption and maturation of financial supply chain management.
Related Links:Supply chain services refers to the providing services in order to increase the efficiency of supply chain. Supply chain finance (SCF) provides the appropriate financing facilities at the relevant points in the physical supply chain. This helps in orderly making of payments and receipts with out damaging the relationships between the parties involved in the supply chain.
The benefits provided by the financial supply chain suppliers are, it enhances the relationship value with dealers and cash flow forecasting, it helps in effective management of the cash conversion cycle and unlock the working capital.
The benefits to the banks includes greater fee and fund based income, cross selling opportunities, enhancing the relationship value with suppliers and dealers.
Easy accessibility to low cost working capital, dynamic discounts, effective management of days payable outstanding, enhanced cash flow forecasting and relationship with customers are benefits provided by the FSCM to the dealers.
According to SWIFT's Conn, the biggest challenge to the development of FSCM as a profitable business line for banks is the number of parties involved and standardization will lead to greater adoption and maturation of financial supply chain management.
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