Data integration firm Volante has launched a supply chain finance (SCF) readiness survey in the Middle East and Africa.
Aiming to assess how ready banks and corporates in the region are for the implementation of new SCF tools such as the bank payment obligation (BPO), the survey will be run at Exporta’s trade finance conferences in Dubai, Cape Town and Nairobi over the coming months, with results expected in April 2013.
Mick Fennell, Volante’s general manager, tells GTR: “When you talk to certain entities, banks, corporates, Swift and the ICC, there’s a lot of enthusiasm for the BPO. But what are people doing to get ready? Do they actually have a plan to change their systems? What our survey is about is finding out who’s gearing up, what they are doing, which of the new types of messages they are looking to support, and how they are approaching that (by upgrading their existing systems or getting new pieces of software in). And more importantly, do people even know what they have to do?”
The survey will also be available online via Volante’s website and offered to target audiences via social media platforms, for an expected participation of 1,000 to 2,000 respondents. It could then be rolled out in other regions, but the firm believes the Middle East and Africa (MEA) is a good first sample due to its growing trade flows with Asia.
“There is an expectation that Asia will be driving adoption; if so, MEA organisations must support their buyers and suppliers in Asia, and MEA banks must support their customers in this new operational model or they will get left behind,” says Fennell.
Questions will also assess whether the BPO is really seen as a major development by the majority of banks and corporates, and how willing they are to take it on board. For example, the survey asks: ‘Do you see this as a major opportunity to improve working capital management and reduce costs?’; ‘Do you see it as a market initiative that must be addressed, albeit reluctantly?’; ‘Is this a major opportunity to win new business?’ and ‘If we ignore this, will it go away?’
“A lot of times at conferences people are in that community and understand it, but there’s a huge wider community that doesn’t understand it. It will always start out with the early adopters, but there needs to be a collective decision to create critical mass,” Fennell adds.
He expects the survey to show a low level of readiness for the new technology, despite all the talk surrounding it. “My expectation is that there are very few institutions capable of doing this right now. There are around 40 banks signed up for the BPO at the moment, and I would say that the majority of these are not ready to send or receive BPO yet. There are an enormous number of banks around the world who haven’t even signed up for this. Corporate-wise it’s the same.”