Global value chain and technology have played a pivotal part in generating wealth in nations and reduction in geopolitical tensions. The integration of technology in supply chain finance (SCF) around the world has fuelled globalisation and simultaneously minimised the gap between the developing and developed nations.
Implementing technology into world trade has made the global economy more balanced and inclusive. More remains to be done as traditional processes pose a major obstacle for the country’s SMEs and MSMEs to trade with the emerging markets.
Participating in global markets and supply chain require narrowing the trade barriers and establishing a seamless process at the core of an efficient and effective cross-border ecosystem. Improving the supply chain finance and management have become all the more critical as trade growth took a nip in the present year, thus limiting its potential contribution to economic growth.
How can technology boost trade and SCF?
The real potential in supply chain meaning lies in the interplay and combination of various technologies and advanced analytics for improved decision-making.
With the rise in technologies like IoT (Internet of Things), blockchain and AI (Artificial Intelligence) – the means to facilitate global trade is also on the rise. IoT has not only garnered better supply chain visibility but also mitigated money laundering and associated risks.
Digitalisation and use of advanced technologies hold immense potential in reducing the processing times significantly and lowering the costs of cross-border goods movement.
Transforming paper-based documentation into an electronic format and application of smart tools and technology has helped in bridging the trading barriers. This has been particularly useful in small and medium enterprises in developing nations.
How is the future shaping up for trade and supply chain?
Modern technology plays a crucial role in targeting trade finance security. As per the latest report, the nation’s supply chain has witnessed a series of cyber-attacks for the last decade. When the nation’s supply chain finance is set to increase by 15% by the financial year 2020, mitigating such cyber threats is of prime importance.
Currently, the nation is facing a shortage of the latest technology. Current processes rely heavily on employing ancient methods to operate standalone business units. This is a major issue for corporate clients and the industries’ managers. However, things have finally started to fall into place as a new approach to integrating AI is reducing the gap of supply chain barriers.
Trade and supply chain finance are essential enablers of international trade. They share a complex structure and involve several inter-linked stages between the production line and the suppliers. Newer technologies can help in speeding up this process and allows enhanced supply chain management. This is also the best time to obtain a small business loan to invest in modern technology.
However, to obtain the most benefit in the shortest possible time is to break the modernisation of trade into segments. Working capital can be the first piece, cash flow the second and an ecosystem of logistics and insurance companies the third. The link between them can be DLTs and secure APIs to up the security.