Business cloud software specialist Infor is partnering with DBS Bank, Southeast Asia's largest bank, to create new opportunities to fund suppliers by integrating digital trade financing capabilities into its Infor Nexus network.

The two companies' first joint programme recently went live with one of the world's largest global apparel companies, providing faster and more cost-efficient digital trade financing to suppliers in the apparel company's supply chain ecosystem, which comprises mostly small-to-medium-sized enterprises (SMEs).

"DBS is a digital bank, based in Asia, focused on supplier funding and liquidity. Its pursuit of digital innovation and delivering greater value to supply chains, combined with our cloud-based platform and local support team around the globe, makes for a powerful partnership at a time when liquidity is a top priority for everyone," says Gary Schneider, vice president of sales for Infor Financial Supply Chain Management.

Sriram Muthukrishnan, group head of trade product management at DBS Bank, adds: "Our collaboration enables greater transparency into complex supply chains and provides insights into the transaction patterns between an anchor and its ecosystem of suppliers. 

"We leverage these insights to provide quicker and more cost-efficient financing to suppliers much earlier in the cycle, as compared to conventional post-shipment supplier financing programs. This is especially relevant today, as we continue to operate in an environment characterised by prolonged trade disruptions and tighter credit lines, where optimal working capital management is key to survival."

The two companies' next joint programme for pre-shipment finance, expected to launch in late 2020, will utilise supply chain data as the primary conduit to assess risk and credit worthiness, as opposed to traditional models that result in the majority of suppliers being underfunded or facing challenges to access necessary capital. 

Infor's supply chain data, including historic and real-time milestone information on the physical movement of goods, enables a data-driven representation of a supplier's performance and credit risk.

According to a research report from Aite Group analyst Enrico Camerinelli (The Supply Chain Bank, 2018): "In the next three years, the competitive frontier in corporate lending and supply chain finance will be the creation of innovative credit risk models that banks will use to leverage corporate supply chain process data. 

"Banks will capture and analyse events in the physical supply chain (source-to-pay, order-to-cash) in order to generate a more comprehensive and realistic representation of a company's risk profile."