Adapting to a changing world: John Omoti on SCF amid deglobalisation and ESG growth

Ahead of the Supply Chain Finance Summit in Madrid on 29–30 January 2025, BCR NEWS spoke with John Omoti Head of Supply Chain Finance, Bank of China, London

The interview delves into how global dynamics, such as geopolitical tensions and high-interest rate environments, are shaping SCF strategies. John also sheds light on the growing interest in sustainability-linked finance, dynamic discounting solutions, and the critical role of SCF in empowering SMEs. With the Supply Chain Finance Summit fast approaching, this conversation offers a valuable preview of the themes and discussions that will take centre stage in Madrid.

BCR NEWS: Have you noticed any impact of deglobalisation on the current supply chain finance (SCF) offerings? If so, what adjustments are required to align with these shifts?

John Omoti: I have noticed a gradual increase in SCF offering towards deglobalisation after the Covid 19 pandemic where global supply chain and timely delivery of goods was seriously affected. This led countries and organisations to take measures to explore production sites closer to home, resulting in the growth of reshoring activities. Wars (Ukraine and Russia), geopolitical tensions have also affected global supply chain further contributing to reshoring in various countries, especially in Europe. Additionally, with the “America First” agenda by the new president, we will see imposing tariffs, quotas, and trade restrictions to protect domestic industries. Obviously, there would be retaliatory actions from trading nations all leading to deglobalisation.

BCR NEWS: What are the main differences between the SCF needs of mid-cap companies and blue-chip corporates?

John Omoti: The SCF needs of a mid-cap company would differ from that of a blue-chip company in some areas. Firstly, a mid-cap company (MCC) would have smaller supply chains which are mostly country / regionally focused, with few suppliers and buyers, while operations can be within one or two countries. In contrast, BCCs manage extensive global supply chains with multiple suppliers and buyers, as well as operations spanning several branches and countries. MCC would have limited access to funds and often rely on banks or third-party financiers for SCF programmes, whereas BCC has stronger access to funds which they can obtain with lower borrowing costs due to high credit ratings. Lastly for MCC, the SCF focus is on improving cash flow and reducing working capital cycles whereas BCC focus is on extending payment terms for suppliers while maintaining supplier satisfaction

BCR NEWS:  Which aspects of SCF are currently most sought after by mid-cap companies?

John Omoti: Mid-cap companies are increasingly turning to Approved Payable Finance as a tool for working capital optimisation. This is because they can obtain funding at lower costs by leveraging the credit ratings of BCC buyers. This is becoming more prevalent because of the high interest rate environment as seen today.

BCR NEWS: Have you observed any shifts in their priorities since COVID-19, such as an increased focus on inventory financing?

John Omoti: Yes, I have seen a gradual increase in our clients looking for some form of inventory finance solution to optimise their supply chain by buying goods on a ‘just-in-time’ basis. “

BCR NEWS: Additionally, what other specific needs have emerged in response to the current economic climate?

John Omoti: We have seen companies showing interest in more flexible SCF solutions like the Payable Finance Dynamic Discounting Finance which combines supply chain finance with dynamic discounting, allowing companies to choose their funding source on demand and offering suppliers reliable early payment access. We have also seen a slow but growing interest in sustainability-linked SCF. This interest is driven by new regulations, such as the EU carbon accounting rules coming into effect in 2025, which will require companies to measure their scope 3 emissions

BCR NEWS:  Are there specific industries within the mid-cap sector that are adopting SCF faster than others? If so, why?

John Omoti: Industries in the retail supermarket, commodity space. This is driven by the demands of their suppliers.

BCR NEWS:  How do mid-caps and blue chips differ in their adoption rates of ESG-focused solutions?

 John Omoti: Blue-chip companies have higher ESG adoption rates overall, 88 per cent of publicly traded companies had ESG initiatives in place as of 2020 whereas mid-cap companies show lower but still significant adoption rates: about 77 per cent of small and mid-caps have a formal purpose statement related to ESG. Adoption is often driven by regulatory compliance or pressure from large customers (especially BCCs) in the supply chain. It is also driven by shareholder expectations, reputational risks, and the need to align with global ESG trends and commitments to international agreements like the UN Sustainable Development Goals, Paris Climate Accord, etc.

BCR NEWS:  What do you anticipate will be the most critical issues discussed at SCFS25 in Madrid, and why do you consider them particularly important? 

John Omoti: Navigating Supply Chain Disruptions / Risk-sharing mechanisms and adaptive SCF models for volatile markets – this topic is very important due to persistent challenges such as geopolitical tensions, inflation, and natural disasters continue to disrupt supply chains globally. SCF can play a crucial role in providing liquidity and stability to suppliers during such disruptions. Secondly is Digital Transformation in SCF,  looking at how digital solutions like blockchain, AI, and real-time data analytics are transforming traditional SCF models. Thirdly is Empowering SMEs Through SCF. This is because SMEs are the most vulnerable part of supply chains so there is a need for greater access to SCF to ensure liquidity and growth; financial inclusion is critical for ensuring that SCF programmes support small and mid-sized suppliers in emerging markets.

To explore more about the evolving landscape of supply chain finance and hear from experts like John Omoti, join us at the 11th Annual Supply Chain Finance Summit in Madrid on 29–30 January 2025. This is your chance to discover the latest trends, connect with industry leaders, and gain actionable insights to drive efficiency and resilience in your supply chain. Don’t miss it! Register today.

SCFS25 is sponsored by Codix, Finastra, FCI