There are decades where nothing happens, the old saying goes - and weeks where decades happen. Since the start of the pandemic, a lot has happened – and successful business have adapted accordingly.
Throughout the pandemic, the pace of corporate digitisation was unprecedented, as whole value chains embraced modern, online practices simply to survive. Now, as the world bounces back from the COVID-19 era, the advantages of that digitisation are becoming clear.
This story is an edited excerpt of insights found in the latest ANZ Transaction Banking Newsletter.
Read the full piece to find out more.
The pressure to modernise has never been greater in a digitally expectant marketplace. The rate of technological change, shifting regulatory expectations, and an increased focus on productivity and sustainability from both business and investors are all adding to the push to digitise.
Meanwhile, as the workforce grows increasingly comfortable with digital tools – yet another indelible impact of the pandemic – employers are changing their approach to technology accordingly.
In trade finance, changing attitudes have led to a growing acceptance of electronic executions and documentation, such as e-signatures, e-drawdowns and e-claims - in return for significant benefits for all parties.
Commercial trade documents are experiencing a shift toward digitisation, too. Examples of this can be seen in the standardisation of eInvoicing protocols such as PEPPOL and standardisation of regulations such as MLTER for electronic bills of lading.
See & supply
The use of supply chain financing - by nature more amenable to the use of data compared to traditional documentary trade-finance products – is growing at faster rate than ever before, fuelled by challenges brought about by the pandemic and geo-political conflicts. This growth has been supported by technologies which enable digitisation of entire supply chains.
These latest developments will enable supply chains to become transparent, connected, and self-orchestrated data-driven ecosystems to identify and respond to risks or disruptions before they happen, while also providing secure two-way and near-real time connectivity (and visibility) across the entire supply chain.
Some of the key technologies enabling these developments and, in turn, providing visibility are:
• cloud computing and blockchain;
• artificial intelligence (AI) and machine learning (ML);
• robotic process automation (RPA) and smart contracts;
• internet-of-things asset tracking and NFTs; and
• powering process automation
Digitising the supply chain can enable deep-tier visibility and promote sustainability goals in ways traditional methods do not. For instance, ‘intelligent visibility’ - the ability to know the provenance of a product or its components in a supply chain - is a feature that can satisfy growing sustainability demands from customers, investors and regulators.
Additional benefits to moving towards a digital supply chain process can include:
• informing supplier selection;
• streamlining supplier onboarding and automating supplier management;
• providing real-time information along the supply chain (temperature, speed, provenance); and
• predicting in operational issues, bottlenecks to allow for mitigation in advance.
Data & insight
Data is critical to unlocking the benefits of digitisation. The wealth of data generated by digitisation needs to be curated and - where appropriate - securely exchanged. There are now an increasing number of platforms that provide secure ways for various parties in a supply chain to capture, curate and exchange data.
The Trade Information Network (TIN) is a global platform formed by a six-bank consortium, of which ANZ is a founding member, and one example of such a platform. TIN enables the secure exchange of information giving trade financiers visibility into a customer’s supply chain, and providing opportunities to inject liquidity into the supply chain throughout its life cycle.
The network helps corporations submit and verify purchase orders and invoices, as well as request pre- and post-shipment financing. By providing financiers with access to trade data, TIN helps mitigate the risks of double financing and fraudulent trade data.
This enhanced ability to assess risk helps facilitate trade financing across the supply chain, including for SMEs who have traditionally found it challenging to access trade finance.
The predictive analytics capabilities that come with some digital-trade tools are increasingly vital to decision-making within corporate treasuries. And the cost benefits can be immense.
The use of robotic process automation (RPA) has been shown to save companies as much as 60 per cent of the annual costs spent on certain trade finance processes – and can free up staff to focus on other valuable endeavours.
The shift to digitisation itself is never cheap, but the long-term benefits of digitisation justify the initial expense – as the smart businesses which were early movers are now finding out.
This publication is published by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (“ANZBGL”) in Australia. This publication is intended as thought-leadership material. It is not published with the intention of providing any direct or indirect recommendations relating to any financial product, asset class or trading strategy. The information in this publication is not intended to influence any person to make a decision in relation to a financial product or class of financial products. It is general in nature and does not take account of the circumstances of any individual or class of individuals. Nothing in this publication constitutes a recommendation, solicitation or offer by ANZBGL or its branches or subsidiaries (collectively “ANZ”) to you to acquire a product or service, or an offer by ANZ to provide you with other products or services. All information contained in this publication is based on information available at the time of publication. While this publication has been prepared in good faith, no representation, warranty, assurance or undertaking is or will be made, and no responsibility or liability is or will be accepted by ANZ in relation to the accuracy or completeness of this publication or the use of information contained in this publication. ANZ does not provide any financial, investment, legal or taxation advice in connection with this publication.