Skip to main content

2018 | Buch

Supply Chain Finance and Blockchain Technology

The Case of Reverse Securitisation

verfasst von: Dr. Erik Hofmann, Urs Magnus Strewe, Nicola Bosia

Verlag: Springer International Publishing

Buchreihe : SpringerBriefs in Finance


Über dieses Buch

This book investigates how the Blockchain Technology (BCT) for Supply Chain Finance (SCF) programs allows businesses to come together in partnerships and accelerate cash flows throughout the supply chain. BCT promises to change the way individuals and corporations exchange value and information over the Internet, and is perfectly positioned to enable new levels of collaboration among the supply chain actors.

The book reveals new opportunities stemming from the application of BCT to SCF financing solutions, particularly reverse factoring – or approved payables financing. To do so, it first identifies the principal barriers and pain points in delivering financing solutions. Then, a possible blockchain-driven supply chain model is defined.

Using this framework, the book subsequently discusses relevant use cases for the technology, which could open up new opportunities in the SCF space. It demonstrates that blockchain and distributed ledgers technologies could deliver substantial benefits for all parties involved in SCF transactions, promising to expedite the processes and lower the overall costs of financing programs.

Industry giants such as IBM, Maersk, China-based Dianrong and FnConn (a Foxconn subsidiary) are currently working to digitize the global, cross-border supply chain using blockchain technology, and will likely soon create blockchain platforms for supply chain finance. These solutions aim to reduce complexity and make data sharing more secure, accurate and efficient. This book offers a highly topical resource for stakeholders across the entire supply chain, helping them prepare for the upcoming technological revolution.


Chapter 1. Introduction—Why to Pay Attention on Blockchain-Driven Supply Chain Finance?
The objectives of this book are to define the opportunities for SCF offered by possible applications of BCT in the supply chain and the capacity of this technology to deal with the existing barriers and pain points. As being located at the intersection of logistics, supply chain management, collaboration and finance, SCF solutions could particularly benefit from the features offered by this new and exciting technology.
Erik Hofmann, Urs Magnus Strewe, Nicola Bosia
Chapter 2. Background I—What Is Buyer-Led Supply Chain Finance?
SCF is a direct response to an evolving situation of the global trade conditions and offers an alternative solution for financing businesses, which generates liquidity and improves working capital. Instruments such as reverse factoring and reverse securitisation are a perfect example of a win-win situation between buyers, suppliers and banks. The principal barriers are represented by the burdens of KYC requirements and the accounting treatments.
Erik Hofmann, Urs Magnus Strewe, Nicola Bosia
Chapter 3. Background II—What Is Reverse Securitisation?
Reverse securitisation technique is lesser (if not) discussed in the literature and differs substantially from the conventional receivable (or supplier-led) securitisation. Technology platform-driven buyer-led securitisation approach can result in the best pricing option and can in part overhaul a domain that has traditionally been ruled by specialised banks. Due to the complex financial structure, high transaction costs are seen as the main barrier.
Erik Hofmann, Urs Magnus Strewe, Nicola Bosia
Chapter 4. Background III—What Is Blockchain Technology?
Contrary to the current systems, with BCT, transactions are broadcasted, recorded and stored by many participants of the network and not in any central proprietary server, which allows transactions to be finalised in minutes because no reconciliation or any manual intervention is needed in the background. Further improvements of the technology offer the capability of implementing a broader range of software routines, including the entirety of what is offered by mere token systems, which opens up the possibility of also representing financial securities and instruments directly on the distributed ledger.
Erik Hofmann, Urs Magnus Strewe, Nicola Bosia
Chapter 5. Concept—Where Are the Opportunities of Blockchain-Driven Supply Chain Finance?
High level of standardisation and transparency could be a strong enabler for SCF programmes. Blockchain-driven documentary trade processing could become the catalyst to establish a fully straight-through process (STP), supporting the programme setup until the key day-to-day operations. The benefits of an application of BCT range from cost-effective securities settlement, which makes the investment in payables asset class more attractive, to cost-effective onboarding processes through shared trusted KYC registry. Other benefits could arise from a faster invoice approval, clear title of ownership and invoice validity, as well as from faster and cheaper payment systems.
Erik Hofmann, Urs Magnus Strewe, Nicola Bosia
Chapter 6. Discussion—How Does the Full Potential of Blockchain Technology in Supply Chain Finance Look Like?
Having summarised the key findings from the application of this technology for approved payables financing techniques, it has become clear that there is greater potential for SCF instruments that are initiated earlier in the supply chain process. For these instruments, the risks are higher, and the visibility of the physical flow of goods is a key element of an effective SCF for which the blockchain offers interesting uses. For this reason, we extend the scope of the research and analyse the other principal SCF techniques in order to cover all principal financing solutions along the supply chain (i.e. purchase order [PO] financing, inventory financing and receivables financing). This could help to identify possible future research opportunities on the topic of blockchain-driven SCF.
Erik Hofmann, Urs Magnus Strewe, Nicola Bosia
Chapter 7. Conclusion—What Can We Learn from Blockchain-Driven Supply Chain Finance?
This book has revealed significant opportunities that arise for SCF from the application of the emerging BCT in finance and along the supply chain processes. Particularly, the capacity to help to overcome certain barriers and pain points provides higher transparency and automation for all the financing techniques triggered by events along the supply chain.
Erik Hofmann, Urs Magnus Strewe, Nicola Bosia
Supply Chain Finance and Blockchain Technology
verfasst von
Dr. Erik Hofmann
Urs Magnus Strewe
Nicola Bosia
Electronic ISBN
Print ISBN

Premium Partner