5 Supply Chain & Trade Finance Wishes for 2017

Supply Chain Finance (SCF) and trade finance are topics that receive no shortage of discussion, expert opinion, vendor views, blog posts, conference events, and even occasional references from the WSJ, NYT, etc.

The role of “missionaries” or what we call subject matter experts is to provide a public statement of information. This public statement can run counter to private information or beliefs and what is really true. In effect, the context of what “everyone knows” is whatever the Missionary (or blogger, or “expert”) says it is.

In the area of trade and supply chain finance, this is very dangerous (it’s even more dangerous at the political level, but that is a big sidebar).

I’d like to relate a personal story where I learned the role of missionaries. I first went to NYC when I was 18. I remember my friend and I walking the streets and I saw a crowd around a gentleman with an upside down table. He had three cups and underneath one he had a small ball.  It became apparent the name of the game was put $10 or $20 down and guess where the ball was.   I watched as one of the gamblers was winning and it seemed so easy.  I came to learn that this “winner” was an accomplice of the swindler, otherwise known as a shill. We have that problem with some of the so called experts around trade finance and Supply chain finance. I feel there are too many “shills” in trade and supply chain finance.

So in the realm of not acting too greedy, here are 5 trade and supply chain finance wishes I have entering 2017:

  1. I wish we had more recognized thought leaders, people that are not afraid to call BS, to raise difficult issues, to put themselves out there and provide real insights, not regurgitated information coming from PR firms via vendors. Most of these so called pundits have very little understanding of credit, capital and bank markets and tend to view SCF and trade finance as at technology issue. My wish is for more leading industry analysts willing to speak out on issues, address the elephants in the room and not be a shill for the bankers or vendors. Sometime I feel like Trade Financing Matters is the only one calling BS on things like Blockchain, the ICC Trade Loss Registry, Exim bank, etc. No one wants to disrupt the apple cart.  Where are the Big 4? The marquee consulting firms like McKinsey? I understand bankers cant discuss things openly given the compliance and legal hell they live in, and hence they reason they typically hold three views – public, private and what the bank tells them to say.
  2. My next wish is for supply chain finance conferences that actually have companies and lenders engaging, discussing reality and challenges. I wish more companies contributed presentations at industry conferences and discuss real challenges. It seems like the same old companies show up at conferences and carry the load. And also please lose the panels - is there nothing more boring than rehearsed panels. I also wish conferences focused more attention on the finance needs and opportunities for small and medium sized companies.
  3. Next lets get rid of phony awards – such and such has the best supply chain finance program, or onboarding program, or platform, etc. If suppliers and companies voted on this, that’s one thing. We can all do with less self-promotion.  I understand publications make their money off this stuff, and everyone else does too.
  4. Next I would like to see vendors that were willing to open their kimonos to their networks and share information (I get the reason why no one wants to raise it, but it would be nice to have data).  There are supply chain finance technology vendors, p2p vendors, supplier networks, B2B networks and others that collect vast amounts of data.  Other than using for self-promotion, we have not been able to use to help us understand markets.  Perhaps a role for some of these member organizations?
  5. Finally, can we get some reality around all this digitization and change the world stuff? All the noise around new digital trade solutions and Blockchain that are going to change the world – when in private everyone tells me that this just isn’t so, at least not in the next few years. Again, it gets back to having incentives aligned for many of these new initiatives.  I wrote about that here - Everything Blockchain.

It’s sad when I ask people who are the leading thought leaders. Many are hard pressed to come up with real leaders, it’s just a small list of shills.

What is on your list for 2017?  

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Voices (3)

  1. Dan Juliano:

    Hi David happy holidays
    Regarding your wish list why would the experts or any company do it? What would be the benefits for them? There is ton of BS out there but many industries have the same issue. Unless there is some financial gain it is hard to justify the exposure.
    Actually you and other media sources are probably best positioned to help work through these issues. I like your wish list but just don’t see it changing.

    All my best
    Dan

    1. David Gustin:

      Dan,

      I respectfully disagree.

      If our lobbying groups continue to grope for things that make the industry look good but dont really solve the fundamental problems such as the market for finance drying up for Tier 2,3 emg market banks, thats a huge problem.

      Conferences can certainly improve. We can stop the phony awards. And we can call out the shills who promote meaningless dribble.

      Its just who is going to stand up and do it. Your point about financial gain, I dont buy it. A person’s reputation means everything, and if they will be a “false” or misinformed or uninformed missionary in my terms, their reputation is damaged.

      Best for 2017

      David

  2. Daniel Cotti:

    David
    spot on! I love your 5 points and subscribe to every single one of them. I couldn’t agree more with your assessment.

    I am sure that going forward we will see the “real” experts and “real value added business models” separate from the “phoney” ones and the ones that are “just self-promoting mediocre offerings or are all talk an no action”. Real value add and quality will always win in the long term.

    Happy New Year and lots of success in 2017.

    Dani

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