The rise of SCF and fintechs highlighted at ICC Miami

At the ICC Banking Commission Meeting in Miami on the 5th April,   Maria Fernanda Garza, Chair of ICC Mexico said that open account trading had become the ‘main form of trade finance’, and  had ‘replacing traditional trade finance instruments, such as letters of credit and other short-term pre-shipment trade loans typically covered by banks.

Ms. Fernanda Garza, who provided the opening speech to the conference, also said ‘supply chains have become much more fragmented and dispersed with longer and wider-growing networks of small and medium-sized upstream and downstream enterprises around the world. And that ‘n this regard, new supply chain finance is an important opportunity area and a focal point of current competition.’

The disruption caused by the rise of fintechs over the last ten years was also a key element of Ms. Fernanda Garza speech. She said that fintechs are starting to become successful in segments traditionally occupied by banks; and are delivering alternative trade finance solutions, such as supply-chain financing.

Ms. Fernanda Garza’s comments about SCF certainly seem to be borne out by the recent figures quoted in BCR’s World Supply Chain Finance Report which quote an estimated increase of 36% in volumes in 2016 over 2015.