China Systems CEO Stefan Tryggvason highlights the transformative potential of supply chain finance and shares his thoughts on the technologies and trends that platforms are likely to embrace to cater to the industry’s changing needs.


In recent years, supply chain finance has gained significant momentum. This innovative form of financing offers unique advantages over traditional loan types such as working capital loans and trade finance and this is mainly due to its ability to enhance cash flow efficiency for businesses. Traditional trade finance primarily focuses on transaction-specific financing, risk mitigation and collateral-based lending. In contrast, supply chain finance adopts a collaborative approach, optimising working capital, fostering relationships, and leveraging the creditworthiness of buyers to benefit suppliers.

For the past four decades, China Systems has been a leading provider of traditional trade finance solutions, serving more than 100 bank customers across the globe. With positive feedback from customers on significant customised supply chain finance implementations, supply chain finance has since become a highly successful core component within China Systems’ expanding portfolio of products. While new business in traditional trade remains solid, we have observed a remarkable surge in demand for tailor-made supply chain finance with bespoke functionality and reporting.

Supply chain finance promotes collaboration among buyers, suppliers and financial institutions, fostering mutually beneficial relationships. In contrast to traditional loans that mainly assess the creditworthiness of the borrower, supply chain finance considers the creditworthiness of the entire supply chain ecosystem with time-sensitive historic data playing a large role in determining limits and drawdowns.

This collaborative approach is having a significant development impact, particularly in emerging developing countries, as it allows suppliers, especially small and medium-sized enterprises (SMEs) to access financing at more favourable rates. By including multiple stakeholders in the financing process, supply chain finance enables businesses to strengthen their supplier relationships and create a more resilient supply chain.

The landscape of supply chain finance has been rapidly evolving since its inception, driven by advancements in technology and changing business dynamics. Globalisation has slowed somewhat but trade continues to expand, and now, with supply chains becoming more complex, financial institutions and corporates must stay ahead to effectively navigate the challenges and opportunities that this brings.

One of the most significant trends in supply chain finance and trade finance alike is the remarkable surge in digitalisation and process automation. Traditional paper-based transactions are rapidly being replaced by digital platforms. Here at China Systems, we take pride in offering such a cutting-edge platform, which facilitates real-time visibility and faster processing as we are connecting buyers, suppliers and financial institutions, enabling efficient collaboration and funding. In fact, some of our customer sites have even integrated our platform with their corporate enterprise resource planning (ERP) systems to streamline the process further.

Supply chain finance platforms that we have implemented have expanded banks’ reach while also granting corporates access to a broader range of funding options. Moreover, as our platform can be extensively configured with minimal coding, it can provide greater control over financing processes and enhance further bespoke collaboration within the supply chain.

As a technology vendor, we play a crucial role in facilitating and enhancing the experience of all the parties that collaborate on our platform. By enabling seamless connectivity between buyers, suppliers and financial institutions, we create a transparent and efficient financing process. Through our platform, buyers and suppliers can easily request financing and access multiple options tailored to their needs.

Our user-centric approach is at the heart of everything we do. At China Systems, we continuously strive to enhance the intuitiveness and user-friendliness of our products, providing easy access to financing options, transparent information on transaction status and real-time visibility into the supply chain. While functionality remains essential, improving efficiency and reducing the learning curve for all parties involved is of prime importance as well.

Security and compliance are non-negotiables and we make sure they remain our top priorities. Our robust encryption, data protection measures and adherence to relevant regulatory requirements instil confidence in both buyers and suppliers, enabling secure transactions with financial institutions.

Enrollment and onboarding are a breeze with our automation and digital processes. Minimising manual paperwork and expediting the know your customer (KYC) and due diligence procedures improve the overall journey, enabling quick and efficient transactions for all parties involved.

But our commitment does not end with financial solutions. Our integration capability to third-party platforms allows us to offer value-added services such as data analytics, risk assessment tools and supply chain visibility solutions, empowering buyers and suppliers to make informed decisions, fortify their financial positions and optimise their supply chain operations. We also offer seamless integration capabilities with numerous third-party systems such as accounting, compliance, KYC and treasury, as required by our customers.

As sustainability and environmental, social and governance (ESG) factors have gained prominence, we are already ahead of the curve, providing technology that facilitates ‘greener’ financing. This can act as a strong incentive for corporates to adopt environmentally friendly practices, ensuring transparent reporting and traceability throughout the supply chain. Collaborating with financial institutions that have expertise in sustainable finance is a key part of our strategy.

As we move into a new realm of technology-enabled financing, I must mention some of the technologies and trends that I think will start to become increasingly commonplace in supply chain finance platforms.

The Internet of Things (IoT) and big data analytics promise real-time visibility, predictive insights and proactive risk management. IoT devices, such as sensors and RFID tags, collect vast amounts of data at various points along the supply chain. Coupled with big data analytics, this data can offer valuable insights into inventory levels, demand patterns and supply chain performance and I think it is only a matter of time until we see the proliferation of this data into the more robust and capable supply chain finance platforms.

And, of course, we cannot overlook the potential of artificial intelligence (AI), especially when paired with IoT device integration and increased data, in enhancing real-time visibility into the physical supply chain for more efficient and cost-effective operations. AI development has accelerated at an astounding rate; it is already having a huge effect across various industries and will have a dramatic impact on trade and supply chain finance. I have no doubt that in the coming years, we will see a lot more AI making its way into the day-to-day operations of trade finance and supply chain finance. There is a lot of concern regarding AI’s capacity to replace humans in the workplace, which I can appreciate, and we must therefore collectively advance with caution. However, my outlook is more optimistic: far from being a threat, AI equips us with better tools to perform tasks more efficiently, just like what our pioneering digital trade products did many years ago.

Today, as technology and business trends continue to shape the supply chain finance landscape, banks, corporates and vendors alike must proactively prepare for the future, first and foremost by continuously improving the platforms that form the bedrock of their operations but also by embracing the wave of incoming changes such as digitisation and automation, ESG factors, IoT, big data and AI to stay competitive and resilient.

In summary, the future of supply chain finance lies in harnessing the power of technology, embracing sustainability, and fostering widespread collaboration across the ecosystem. China Systems as a company intends to remain at the forefront – pioneering new and innovative solutions driven by customers’ needs.