Shop Talk: With the growth of major players such as Ant Financial in Asia in 2019, TFG asked Accenture’s European Banking Lead, Cecile André Leruste, on her thoughts and predictions for trade and SCF in 2020, focusing on growth coming out of South Asia.
In this 2020 interview series, TFG spoke to 20 experts in trade, receivables and supply chain finance.
An Interview with Accenture
Name: Cecile Andre Leruste
Position: Europe Banking Lead, Managing Director
Interviewed by Nikhil Patel (NP), Analyst, Trade Finance Global
2019 – Competition Entering from the East & TradeTech Collaboration
Nikhil: In 200 words, what were the key highlights and opportunities of 2019 from an industry perspective in trade, receivables and supply chain finance?
I see four major highlights in 2019 that have impacted the Trade, Receivable and Supply chain market:
- New competition entering the market from the East, particularly from China with Ant Financial offering its 38 million SME customer base trade finance solutions.
- Technology becoming an enabler of faster, more effective and efficient compliance, with recent success around AML (with Regtechs such as Quantexa, ThetaRay and Ripjar). Leading European and Asian banks have made great progress on that front.
- Regarding process digitization, technologies such as OCR and AI are being increasingly coupled with RPA to help streamline the back office and keep staff focus on value-added tasks, and to reduce bulging costs. The major players, though, have not tackled the costs of complexity.
- The emergence of international banking consortia in trade, supply chain, commodity trade, sometimes leveraging blockchain to provide alternative front-end channels or common information to prevent fraud, while physical supply chain consortia are emerging in selected industries. Those consortia are learning to become “tech players” alongside editors and providing a new scale to their partners, with the hope to generate new business and reduce costs. Their major issue will be to attract new types of skills and partner with SI players to get to scale and upgrade their solutions quickly.
NP: What are your top predictions for trade, supply chain and receivables in 2020?
- Growth: In the context of trade tensions, with ERPs and other tech players trying to disintermediate from banks, the development of Social Responsibility and the call for recycling could limit the market growth. On the other hand, trade finance will be a great playground to test new services around the circular economy, providing both solutions and information for corporate clients. Rating exporters and proposing “blue” transporters could provide value and increase growth.
- While banks have tested a number of more or less mature technologies, the major issue will be to implement them at scale, leveraging the appropriate data. Data discovery, data management and data protection could become the major weapons for banks in their fight against or partnership with Big Techs.
- I see a strong shift from Compliance to Operational risk mitigation, with a focus on Fraud and Cybersecurity.
2020 Predictions in Trade and Supply Chain Finance – An Accenture Perspective
NP: In 200 words, what are the biggest challenges in trade, receivables and supply chain finance you predict for 2020?
- Growth: While some players are still struggling with their internal complexities and focusing on gaining incremental cost reductions, we see few players positioning to capture new markets and new services.
- Regarding data, we see several change hurdles that prevent players from moving, including poor quality of data, lack of will to proceed to systematic data cleaning, fear of clients not giving their consent, and limited implementations at scale.
- While insurers are actively entering the cybersecurity market to propose new offers, banks have not yet leveraged their strong cyber teams to develop solutions for corporates in the trade finance ecosystem.
Commodity finance enters a new digital era of platforms, networks and consortia
Read the full interview here.
NP: What are the key priorities for Accenture in 2020?
We have three major priorities:
- Innovating around trade finance, with all the partners of the trade ecosystem: banks, new entrants such as BigTechs, editors such as Finastra or TradeIX, and Fintechs and/or Regtechs
- Pursuing our support of consortia, which will increasingly concentrate the front-end innovation of major players
- Supporting our banking clients’ shift to CSR.
NP: What’s your top prediction for a technology that you think will truly kick off / have the most success in 2020?
I would focus on Artificial Intelligence as a way to support RMs in particular. As trade finance gradually covers SME clients, providing tailor-made solutions will only be realistic with the ability to target selected segments with the appropriate business case. Leveraging data through AI will be key.
In 2020 I think we will see the first implementations at scale, and that should make a difference