With the development of industrial economy and increasing improvement of the trading links for supply chain, commercial banks compete for the field of supply chain finance in greater intensity. In recent years, upholding the concept of “Financing Supply Chain and Creating Long-flourishing Business”, Industrial Bank (IB) has kept developing the supply chain finance vigorously, winning extensive recognition by enterprises and social organizations. It has won a number of prizes such as the “2012 Competitive Bank for Outstanding Supply Chain Financial Service” and the “2012 Best Bank for Supply Chain Finance Service in the CBN Financial Value Ranking (CFV)”.
While achieving significant achievements, IB kept exploring the connotation of supply chain finance service and seeking the path of sustainable development. It is reported that, in order to improve the capability and competitiveness of supply chain finance service, the supply chain finance service of IB will further deepen its specialized business operation and begin to build an electronic platform for supply chain finance, so as to create an electronic ecological circle for supply chain financing.
Supply chain financing forged ahead with accumulated power
As an important part of the “one body with two wings” strategic planning of IB for corporate finance, the bank began to prepare for the construction of a trade finance center in 2010. With two years' practice and exploration, IB has witnessed significant fruits in the development of supply chain finance. It has built a systemic foundation framework for supply chain finance, established the development model of “M+1+N” and formed an all-chain service system for supply chain finance including advance payment, stock-in-trade and accounts receivable and covering all the processes of domestic trade and import and export trade.
In terms of product innovation, upholding the objective of “increasing shares in the mainstream markets and providing distinctive services in segment markets”, the bank provides a variety of standardized and non-standardized trade financing products to the upstream and downstream enterprises of industrial chains in the “M+1+N” service network for supply chain finance, by way of reining core enterprises and various elements in the trading links and combining the trading characteristics of all the links of purchase, production and sale of enterprises.
Specifically, the domestic trade financing products include both the three categories of standard products: advance payment, stock-in-trade and accounts receivable, and individualized integrated service solutions customized for customers; the international trade financing products cover both the three major series: export trade financing, import trade financing and external guarantee, and individualized international trade financing solutions provided to import and export enterprises.
At present, the supply chain finance of IB covers all links of advance payment, stock-in-trade and accounts receivable of enterprises, capable of providing them with a package of integrated financial services including financing, settlement, foreign exchange risk-avoiding service, and cross-border RMB service, etc., thus meeting the financing demands of SMEs in a supply chain effectively.
In terms of organizational structure, with over two years of exploration, IB has improved its specialization in the service system for supply chain finance in such aspects as the arrangement of organizational system, innovation in financial products and services, concentration of credit examination and approval procedures, risk control, performance assessment, and resource allocation organs.
Up to now, IB has set up trade finance department in over 30 branches across China and established a professional team consisting of more than 400 specialized product managers, who provide technical support for the development of supply chain finance across the bank.
In the aspect of cultivating customer foundation, IB has boosted the common growth of core enterprises and customers both downstream and upstream with the “M+1+N” chained development model, and meanwhile, it has won the loyalty and trust of customers. In this way, the consolidated basic customers of supply chain finance provide a solid foundation for the bank to develop the business of supply chain finance.
By the end of this June, the balance of IB's supply chain financing business reached RMB 277.434 billion (including domestic agency payment), up by 17.91%, an increase of RMB 42.138 billion over the beginning of this year. Meanwhile, the bank has grasped the demands of customers and kept making innovation. Its business of supply chain finance has accumulated an extensive group of stable and loyal customers. The number of customers has kept growing at a fast rate. At the end of June, the bank had 244 core corporate customers of supply chain, increasing by 40 over the beginning of this year. Centering on core corporate customers, IB has developed 1,711 upstream and downstream customers in total, registering a volume of supply chain finance worth RMB 54.34 billion.
Vision of development: deepening specialized business operation and creating an online financing platform
While the competition for the business of supply chain finance becomes increasingly tense among commercial banks and the integrated service level of supply chain finance keeps improving, how to extend and deepen the supply chain finance services become an import consideration for banks to improve their competitive edges in supply chain finance at present. In confrontation with more furious competition and broader market spaces, all banks are upgrading their supply chain finance services in an active way.
For this reason, the supply chain finance of IB launches new exploration in the areas of specialized business operation and online financing.
“We are preparing for establishing the Auto Finance Business Headquarters, which will function as a quasi business department to carry out concentrated assembly line operations, including marketing management, product scheme design, credit approval and risk management, for the customers in the industries of automobile and construction machinery,” the relevant officer of the Trade Finance Department of IB told the reporter.
It is learnt that the auto finance business of IB covers financial service solutions for the four major business sectors: passenger vehicle, commercial vehicle, construction machinery, and distributor group, with over 20 business categories specifically including order financing, pledge with accounts receivable (pool), advance payment financing for distributors, auto consumption credit (applicable for customers purchasing passenger vehicles), store financing, and advance payment financing for auto distributors, etc. In this way, IB provides all-sided financial service solutions and rich product lines in the areas of automobile and construction machinery. Additionally, the auto finance of IB provides diversified and one-stop financial services for customers relying on the financial service platforms of corporate finance, retail banking, credit card center, IB Financial Leasing and Industrial Trust.
Up to now, IB has established close cooperation with 40 well-known brands both at home and abroad such as Dongfeng, Volvo, GAC Group, Beiqi Foton, Zoomlion, Xiamen King Long Motor, SGMW, and Chery.
Apart from the refined management of supply chain finance, with the development of e-commerce, IB has also started promoting the electronic and networked reform in the supply chain finance services, so as to adapt to the needs of modern supply chain management and competition.
“At present, IB is constructing the electronic process management for the business of supply chain business, and planning the online supply chain finance. This will become a highlight for the future business development.” As disclosed by the relevant officer of the Trade Finance Department of IB, the Head Office of IB launched the construction of the first phase of trade finance business system in this November, and it is expected to put the relevant functional modules of the first phase into operation online at the end of the next year.
It is reported that IB has drawn out a route for the online financing of supply chain: to connect the internal system of IB with such databases as corporate ERP system, corporate internet banking, and electronic platforms of regulatory companies and insurance companies and join all links in an electronic manner to the largest extent, so as to embed the capital flow, information flow and logistics into the process of supply chain trade.
In the future, relying on such channels as the electronic banking, IB's electronic platform of supply chain finance can provide online financial operation and services integrating information management, financing, and settlement for core enterprises and relevant upstream and downstream enterprises. While simplifying the business process, the platform can also make it more convenient for enterprises to handle businesses, namely, the can handle all-flow businesses for supply chain financing, such as commodity pledge and financing application, by themselves through the internet banking system without going to an outlet. In this way, the business can be developed without the restriction of physical outlets, and the cost of enterprises in handling business is also saved at the same time.