Blockchain and its potential to revolutionise supplier finance was the key theme to emerge from the Inclusive SCF conference on 24th May. This was the second time that Europe’s financial technology experts and SCF researchers had gathered in Frankfurt, and the first under the auspices of the Supply Chain Finance Community, jointly hosted by Fraunhofer IML and Innopay.
Bart Ras, visiting fellow at Windesheim University and managing director at Greensill Capital, summed up the strength of enthusiasm around blockchain’s potential. “Blockchain today is like supply chain finance itself was seven or eight years ago,” he said. “It feels like the next wave for all of us.”
There was plenty of evidence for Ras’s view. Arnout Buschenhenke of ABN AMRO revealed the first results of the bank’s blockchain-based inventory financing scheme, run jointly with the consultancies Innopay and BeScope and the software provider Exact, and trialled with the Dutch logistics service provider NBK.
The inventory financing request has successfully been placed on the Ethereum blockchain, and a workflow implemented between the logistics service provider (LSP), its SME supplier and the financial services provider – in this case, ABN AMRO, which used the blockchain as a secure way to check the data submitted by the LSP.
“Available within a year”
Further development will include unique reference assets using a lot number or purchase order number, verifying transactions by comparing the source, and extending the inventory financing scheme to include assets that are ‘in transit’.
Pressed to say how far the project was from a saleable project, Buschenhenke suggested ABN AMRO could have a blockchain-based finance product available “within the year”.
Alongside blockchain and its possibilities, the other theme of the conference was that of trust. For companies to exchange sensitive data in the way set out in the Inclusive SCF manifesto, whether on the blockchain or not, there will need to be an environment of mutual trust.
Sven Wenzel (pictured, right) of Fraunhofer ISST laid out a framework within which that trust could be fostered: The Industrial Data Space, an initiative founded in Germany but spreading across Europe and the Atlantic, aims to bring together corporations, academics, consultancies and IT firms to develop frameworks for the safe sharing of data to enable new services to be developed.
Presentations from fintech firms Codix, Crossinx and TrustBills demonstrated that, even without the promise of blockchain, supplier finance is becoming available to an ever wider range of suppliers, suggesting that the aims of iSCF are closer to being realised than many might have thought possible when the conference ran for the first time last year.
The most popular element of the day, though? A blockchain simulation which allowed delegates to race toy cars around a track to demonstrate how a smart contract works (main picture).