Europe's Supply Chain Financing Challenges

As global trade volume continues to increase, corporates are increasingly looking for further supply chain efficiencies in both their day to day operations and in terms of their financial performance.

Combined with the importance placed on the success and longevity of supply chains, the question arises as to how providers can best service the market’s demanding and dynamic requirements to ensure efficient financing arrangements that actively contribute to corporates’ supply chain strategies.

As technology plays an ever-expanding role and is inherently tied to increased and efficient trade, it must also be asked how and where this will continue to be seen. In the context of supply chain financing, and as technology drives further cost decreases, it is important to understand exactly where corporates are looking for their financial provider to add value and efficiency to the supply chain.

As new research from East & Partners (E&P) has identified, a key difficulty for all parties quite simply lies in the size and complexity of MNCs’ supply chains. As seen in the chart below, MNCs in key Western European markets average over 230 suppliers with Germany leading the way at 278. The size of this makes servicing daunting for providers with resource and investment being allocated accordingly, based mainly on supplier risk profiles which generally leads to just the top suppliers meeting financing criteria.

This allocation of resource is played out in E&P’s new research which shows that provider capability corresponds directly to the size of the trade corridor. While this seems common sense, it also highlights the opportunity outside of the key Asian and North American corridors for providers where capabilities are not meeting corporates’ supply chain challenges, such as in Latin America and Africa.

De-risking the supply chain associated with the lesser trade corridors is really the only option for finance providers but, importantly, they share this same goal with their MNC clients across all markets. As such, effective supplier onboarding is a shared objective and with over 85 percent of corporates reporting credit assessments and 84 percent reporting efficient KYC as key tools needed this aligns well with providers’ requirements. How technology addresses these needs will be vital in the coming years as new entrants look to carve out niches in the market. Interestingly, French corporates also report multi-lingual capability in the top two tools needed to perform this function.



Alongside key product enhancements that include integration with ERP platforms, easy onboarding and integration with procurement and purchasing ledgers, service is what corporates most want. An experienced relationship team that understands both the business and its supply chain as well as the market(s) they trade across is what corporates are crying out for – perhaps also a cry for the “old days” when relationships drove business and trade.

As geopolitical issues, market forces and technology continue to open up the global market, how corporates and their supply chain finance partners manage a supply chain that is unlikely to become less complex will be fascinating to watch.


These new supply chain finance insights are derived from the Supply Chain Finance: Voice of the Customer – Insights and Analysis report, a collaboration between East & Partners and BCR Publishing, the leading provider of receivables finance market intelligence.

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