Strategic Advisory for an Innovative Fintech Wishing to Penetrate the Trade and Supply Chain Finance Sector

Strategic Advisory for an Innovative Fintech Wishing to Penetrate the Trade and Supply Chain Finance Sector

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Situation

This early stage Fintech had developed a solution to a major challenge that exists when replacing paper documents with electronic records – the ability to distinguish between an original and a copy, confirm ownership of the original, enable transfer of possession of the original  by delivery and validate authenticity of an electronic record. They believed that their solution could be applicable to the Trade and Supply Chain Finance sector and engaged with Trade Advisory Network to provide deep subject matter expertise to develop practical use cases and to support their penetration into this marketplace.

Challenge

In the context of trade and supply chain finance, the concept of possession of an original document is vitally important especially when the document is negotiable. Whether a payment instrument such as a bill of exchange or promissory note or a document of title such as a bill of lading or warehouse receipt, the ability to transfer rights through endorsement and delivery are enshrined in law in most jurisdictions across the globe.  These laws were drafted and adopted in a paper-based world resulting in legal uncertainty regarding the enforceability of digital versions of negotiable instruments in many markets. The legal challenges have, as a consequence, hampered the well-publicised efforts by the industry to accelerate the adoption of digitalisation.

In an attempt to progress digitalisation, numerous initiatives have been launched including the establishment of several consortia, each bringing together finance providers and trading companies within a closed user group, where all members are required to sign-up to a common contract. This approach avoids the legal uncertainty as the relationships, rights and responsibilities are enshrined in a contract. This requirement is, of course, also a significant obstacle to adoption and creates the additional challenge of enabling interoperability between consortia.

Our client’s digital original document solution replicates the properties of paper documents without the associated disadvantages (inefficiency, susceptibility to fraud and impact on climate change). Requiring no special software (just an internet browser) and no club-membership their solution is open to all and is inherently interoperable.

Their twin challenges were to:

  • demonstrate that their solution would deliver the stated benefits (effectiveness, efficiency, certainty, fraud resistance and sustainability) in practical trade and supply chain finance transactions; and,
  • address the legal concerns regarding enforceability in markets where this is an issue.

How we helped

Working closely with management, we drafted white papers positioning their proposition within the market, together with use cases applicable to real-world scenarios.

We were able to use our influence and credibility to gain interest with leading trade and supply chain finance associations, as well as with leading banks and organisations to establish cooperation with this client.

We continue to advise the client as members of their advisory board and provide direct support in respect to the development of specific business opportunities.

 


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Market Insight for an Industry-leading Fintech

Market Insight for an Industry-leading Fintech

Implementation of Supply Chain Finance

Situation

A fast-growth specialist Fintech company already servicing SMEs sought to extend its proposition into Supply Chain Finance (SCF).

Challenge

The principal challenge for the firm was that despite a close knowledge of the requirements of its target audience, SCF was an entirely new area of business for them and no product knowledge or experience existed in-house.

As with other areas of the business, the owners and their investors considered that it was imperative to establish this extended product line with an aggressive growth trajectory. The directors recognised that external support would be critical in not only designing the proposition but also establishing an operating model that would cater for a streamlined approach without creating major portfolio risks.

How We Helped

Working with the main board directors, we took a holistic approach to the challenges facing the business and advised on the establishment of the main pillars to support the business model. These included legal and credit insurance and the design of a target operating model.

In addition, we assisted in the organisational design and recruitment of a team to launch and take the business forward. Our role included supporting the firm to develop and implement their business model as well as acting as a mentor for the key managers. Due to the nature of the assignment and the gap in product knowledge at client level, it was important to maintain a hands-on approach in respect of risk and controls. The expertise that we have brought to the organisation has also resulted in additional peace of mind for external investors.

The client valued our input in the formation stage so greatly that they have retained us on an ongoing basis in respect of mentoring and portfolio control.


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Reengineering a Major Bank’s Trade Finance Business

Reengineering a Major Bank’s Trade Finance Business

Reengineering Trade Finance Business

Situation

A major bank was looking to develop and implement a robust trade finance proposition.

Challenge

The main challenge facing the organisation was to create an operating model and organisation design that was consistent with the bank’s overall positioning in the corporate segment and its risk appetite.

We were invited at an early stage to provide Strategy, Organisation Design, Performance Management and Interim Management.

How We Helped

Having established the key objectives and outcomes, we defined the market segments by size, industry and geography where the bank had a presence and an appetite for trade finance exposure.

Following an in depth review of the existing product set to evaluate functionality and strategic fit relative to chosen markets and segments, we identified gaps in the proposition and defined a prioritised roadmap for proposition development.

Upon approval of the roadmap, we introduced professional product management disciplines and tools including individual product plans setting out features and benefits relative to segment-specific client needs, competitor/market analysis, development plans based on unmet needs, marketing plans, risk parameters and capital treatment

Core to the assignment was the development of the concept of ‘Product manager as business owner’ with accountability for all aspect of product performance (income, cost, balance sheet, client satisfaction, market perception etc.).

The salesforce was restructured to optimise engagement with key client segments and relative generalist relationship coverage teams. We then redeveloped the sales targeting model focus on key revenue drivers.

The final stage of the assignment was the recruitment and retention of top talent from across the industry in both product management and sales.


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