Six business organisations, including the ICC, have launched the Global SCF forum, aimed at standardising SCF terminology.
The initiative is being led by the ICC Banking Commission, Euro-Banking Association (EBA), Bankers Association for Finance and Trade (Baft), Factors Chain International (FCI), International Factors Group (IFG) and the International Forfaiting Association (IFA).
The project encompasses both traditional and non-traditional products and services that are generally categorised as SCF, such as open account techniques, and will extend to those products offered by financial institutions.
Supply Chain Finance
The initiative will promote competition and innovation, while providing clarity for the marketplace. Initially, it will see the six associations conduct a series of non-binding, open consultations with the aim of completing a set of recommended definitions within the next 12 months.
Tan Kah Chye, chair of the ICC Banking Commission comments on the initiative: “SCF is a growing market with considerable business opportunities identified for the near future. Given increased collaboration among the wide range of bank and non-bank representatives facilitating domestic and cross-border trade, and the advent of Internet and new communication technologies, it is more important than ever before for all market participants to adopt universally-accepted terminology that corresponds to the rich array of processing, financing and risk management techniques currently being developed by the industry to support increasingly globalised supply chains.”