In a conversation with Sabine Zucker, Head of Group Transaction Banking at Raiffeisen Bank International, we discuss trends, challenges, and solutions in supply chain management.
In the current global market, effective supply chain management is becoming increasingly vital for the success of businesses. Given the shifts in markets, technological advancements, and sustainability initiatives, companies face the challenge of optimizing their liquidity and working capital throughout the supply chain.
During the interview, Sabine Zucker explains the essential elements of working capital management and how technological advancements and sustainability considerations can be integrated into supply chain finance.
Ms. Zucker, why is working capital management currently so crucial for companies, and what trends and developments are you observing in this area?
Sabine Zucker: Efficient supply chain management is essential in international trade. Constant market changes, technological innovations, and sustainability initiatives call for a high level of flexibility. Rising interest rates are pressuring companies to release trapped liquidity.
For me, supply chain finance is much broader than just liabilities from deliveries and services, known as payables. We take a holistic view of the topic, examining the entire value chain up to sales financing. As defined by RBI, supply chain finance also includes factoring solutions.
Fintech companies are currently significantly influencing the sector by providing innovative product solutions and alternative platforms. There is considerable discussion about incorporating ESG criteria into supply chain financing. Companies increasingly integrate sustainability aspects into their frameworks to create financial incentives for social and environmental objectives alongside legal requirements. Other trends include digitalization and automation, which enhance transparency and efficiency. Moreover, the growing globalization of supply chains necessitates improved financing and risk management strategies. Finally, heightened regulatory changes are impacting the demand for flexible and technologically advanced working capital solutions.
Overall, we observe that companies are clearly experiencing the effects of rising financing costs due to increased key interest rates. Consequently, the emphasis is now shifting towards optimizing working capital. The well-established practice of factoring is currently in high demand due to its positive effects on balance sheets and liquidity.
Many companies perceive supplier participation as a significant barrier when implementing a supply chain finance solution on the supply-side. How can companies overcome this?
The main challenges include gaining the acceptance and commitment of suppliers and the technical integration of the solution at the supplier’s site. There are often concerns about the control and management of payment terms. To address these issues, companies should engage in transparent and cooperative practices in their role as buyers, involve suppliers early on, and clearly communicate the benefits. Technological tools and automation can facilitate implementation and reduce resistance. Additionally, solutions are emerging in the market that can achieve a positive effect on working capital without requiring supplier involvement.
What makes RBI a good choice for companies looking to utilize supply chain finance, and how does its offerings differ from those of other providers?
At RBI, we provide comprehensive advice and have extensive experience in structuring supply chain finance solutions, particularly on the supplier and sales sides. We prioritize listening to our customers and collaborating with them to develop customized solutions.
What distinguishes us from other providers is our capability to offer not only international structured receivables financing but also innovative local solutions through our network banks in CEE. Our services are flexible and can be tailored to the unique needs of each client. For instance, we provide multinational factoring solutions for receivables sellers across diverse countries, including those with less common currencies, and facilitate local solutions through our network banks. On the payables side, we offer our own solutions, such as Confirming via Raiffeisen Factor Bank, and collaborate with fintechs for innovative alternatives.
How do digitalization and automation contribute to improving transparency and efficiency in the supply chain?
Companies are increasingly leveraging digitalization and automation to gain real-time insights into their liabilities and to develop more accurate forecasting models using artificial intelligence. Banks like RBI are partnering with fintechs to enhance customer experiences and create innovative products. For example, we utilize software for largely automated receivables financing that streamlines the entire process, from making the purchase to generating detailed reports, without necessitating extensive enterprise resource planning integrations. This significantly reduces complexity and integration efforts.
How does RBI integrate sustainability aspects into its supply chain finance solutions, and what advantages does this offer to companies?
We place great importance on sustainability and are actively working to incorporate such components into our supply chain finance offerings. Companies can merge proven structures with sustainability elements and create financial incentives for social and environmental objectives. This reinforces the entire value chain and supports the development of sustainable and resilient supply chains over the long term. In the future, we anticipate a stronger emphasis on ESG KPIs that focus on ecological and social aspects.
Transform your working capital
Strengthen your company’s financial resilience by reducing financing costs and optimizing cash flow management. This will ensure sustainable and reliable access to cost-efficient liquidity.
For more information, visit rbinternational.com
In conversation with Sabine Zucker, Head of Group Transaction Banking at Raiffeisen Bank International, about trends, challenges and solutions in supply chain management.
In today’s global market environment, efficient supply chain management is becoming increasingly important for the success of companies. In view of market changes, technological innovations, and sustainability efforts, companies are faced with the challenge of optimizing their liquidity and working capital along the entire supply chain.
In the interview, Sabine Zucker discusses key aspects of working capital management and how technological innovations and sustainability aspects can be integrated into supply chain finance.
Significance of Working Capital Management
Ms. Zucker, why is working capital management so important for companies at the moment, and what current trends and developments do you see in this area?
Sabine Zucker: Efficient supply chain management is crucial in international trade. Constant market changes, technological innovations, and sustainability efforts require a high level of flexibility. Rising interest rates are putting pressure on companies to release tied-up liquidity.
Current Trends in Supply Chain Finance
For me, supply chain finance encompasses much more than just liabilities from deliveries and services, so-called payables. We look at the topic holistically along the entire value chain up to sales financing. Supply chain finance, as defined by the RBI, also includes factoring solutions.
Fintechs are currently having a major impact on the sector by offering innovative product solutions and alternative platforms. There is also much discussion about the implementation of ESG criteria in supply chain financing. Companies are increasingly integrating sustainability aspects into their structures to establish financial incentives for social and environmental goals as a supplier or for their suppliers, in addition to the legal requirements. Other trends include digitalization and automation, which improve transparency and efficiency. The increasing globalization of supply chains also requires better financing and risk management strategies. Finally, increased regulatory changes are influencing the demand for flexible and technologically advanced working capital solutions.
Challenges in Supplier Involvement
Companies often see supplier involvement as a major hurdle when implementing a supply chain finance solution on the supplier side. How can companies overcome this?
Key challenges include the acceptance and commitment of suppliers and the technical integration of the solution at the supplier’s site. There are often reservations about the control and management of payment terms. To overcome these hurdles, companies should act transparently and cooperatively in their role as buyers, involve suppliers at an early stage, and clearly communicate the benefits. Technological tools and automation can facilitate implementation and minimize resistance. Solutions have also become established on the market that achieve a positive working capital effect without any involvement of suppliers.
Raiffeisen Bank International’s Unique Offerings
Why is RBI a good choice for companies looking to leverage supply chain finance, and what sets its offering apart from other providers?
At RBI, we offer comprehensive advice and have many years of experience in structuring supply chain finance solutions on the supplier and especially sales side. We listen to our customers and work closely with them to develop tailor-made solutions.
What sets us apart from other providers is our ability to provide not only international structured receivables financing but also innovative local solutions in our network banks in CEE. Our services are flexible and can be adapted to the needs of each customer. For example, we offer multinational factoring solutions for receivables sellers in various countries, including those with less common currencies, or enable local solutions through our network banks. On the payables side, we offer both our own solutions such as Confirming via Raiffeisen Factor Bank and innovative alternatives in cooperation with fintechs.
Digitalization and Automation in Supply Chain
How do digitalization and automation help improve transparency and efficiency in the supply chain?
Companies are increasingly using digitization and automation to gain a real-time overview of their liabilities and to create more precise forecast models using artificial intelligence. Banks like RBI are partnering with fintechs to improve the customer experience and develop innovative products. For example, we use software for largely automated receivables financing that covers the entire process from making the purchase to detailed reports without requiring extensive enterprise resource planning integrations. This significantly reduces complexity and integration effort.
Integrating Sustainability in Supply Chain Finance
How does RBI integrate sustainability aspects into its supply chain finance solutions, and what benefits does this bring to companies?
We attach great importance to sustainability and are working to establish such components in the area of supply chain finance. Companies can combine proven structures with sustainability elements and create financial incentives for social and environmental goals. This strengthens the entire value chain and promotes long-term sustainable and resilient supply chains. In the future, we expect a stronger focus on ESG KPIs that emphasize both ecological and social aspects.
Benefits of Optimized Working Capital
Make Optimized Working Capital Happen
Strengthen your company’s financial resilience by reducing financing costs and optimizing cash flow management. This will ensure you have sustainable and reliable access to cost-efficient liquidity.
More information at rbinternational.com
