responding to covid-19 with blockchain-enabled payables finance · 2020-04-30 · new user...
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101 Blockchains Think Tank Webinar Series
LIVE WEBINAR
Presented by:
Responding to COVID-19 with Blockchain-Enabled Payables Finance
Chaired byEnrico CamerinelliIndustry Analyst
Daniel CottiManaging Director, Center of
Excellence, Banking & Trade,
TradeIX
Claire ThompsonExecutive Vice President,
Enterprise Partnerships at
Mastercard
Alisa DiCaprioHead of Trade and
Supply Chain at R3
LIVE WEBINAR
The webinar will commence in a few minutes
101 Blockchains Think Tank Webinar Series
Responding to COVID-19 with Blockchain-Enabled Payables Finance
101 Blockchains Think Tank Webinar Series
LIVE WEBINAR
Presented by:
Responding to COVID-19 with Blockchain-Enabled Payables Finance
Chaired byEnrico CamerinelliIndustry Analyst
Daniel CottiManaging Director, Center of
Excellence, Banking & Trade,
TradeIX
Claire ThompsonExecutive Vice President,
Enterprise Partnerships at
Mastercard
Alisa DiCaprioHead of Trade and
Supply Chain at R3
Webinar Topics
➢Keeping businesses, supply chains, and the economy intact requires
rapid intervention
➢ Innovative financing solutions focusing on SMEs and global supply
chains are a necessity
➢Such solutions require rapid onboarding, simple integrations and
low-cost deployments
LIVE WEBINAR101 Blockchains Think Tank Webinar Series
A few housekeeping tips
Use the Q&A feature to ask your questions
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Responding to COVID-19 with Blockchain-Enabled Payables Finance
April 30, Thursday, Time: 12:00 pm ET | 18:00 CET | 16:00 GMT
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How covid changed the way we talk about blockchain in trade
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• 71% of banks report enacting COVID - 19-related measures to support customers
• Most report trying to scale up existing digital solutions, using digital hacks
• Reported solutions are clunky, not viable in long term
In a global emergency, international trade may slow but it must not stop
• All banks report 75-90% of operational staff working remotely
• Natively digital documents are critical to this flow
• Where blockchain is in place, trade flows less impacted by lack of courier service, remote staffing
Short-term digital transformation requires flexibility to scale up and down
Rapid evolution in practices around e-signatures and e-docs
• Less than 1/3 of banks are requiring paper originals during COVID - 19
• Regulators issuing directives and guidance to promote electronic documents even
where regulations do not yet support
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Addressing Challenges of Covid 19 Rapid response through digital solutions
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Acceleration through collaboration
• Leverage the combined might of our clients and partners to provide a powerful solution in a time of need
Digitally connecting businesses
• Driving economically sustainable solutions to SMEs underpinning with the safety and security of the global network and blockchain technology
Prioritizing Social responsibility
• Highly targeted and impactful initiatives, enabling money to flow to businesses that are essential to the practical combatting of the virus
Delivering liquidity to essential supply chains to stabilize
• Providing easy access to cash for critical SME suppliers
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Amplifying scale, connectivity and security of global networks
9
Financial, Physical &
Informational Trade processes
Logistics, Insurance, data
providers
Bank & non bank funders
Buyers & Suppliers
Corda Distributed Ledger Technology
Business
Financiers
Third party
service
providers
• Simplified corporate interaction utilising existing ERP files
• Access to 30+ trade finance banks globally
• Digital trade information from third parties incl. shipping, logistics
• Secured and permissioned through distributed ledger technology
• Fastest global network that brings, trust, standards, security and reliability
• Effective & efficient onboarding
• Access to digital trade flows through partner Networks
• 50 million corporate, 22500 banks & billions of consumer relationships worldwide
• Multi-rail payment capability – national infrastructure provider (real-time payments, ACH, cross border, card, ATM and e-com)
Trade Instruments, corporate, banking & consumer relationships
Onboarding
Multi-Rail/Currency Payment & Rich Data
Digital
Identity
Networks
Pay
Disburse
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The world’s largest and fastest growing distributed network for global trade and supply chains.
Marco Polo Network
Financial
Institutions
Technology
Partners
Corporates
30+
7
20+
Open and distributed network for trade
and working capital finance powered
by open Application Programming
Interfaces (APIs) and blockchain
technology.
Facilitating trade and working capital
finance solutions creating better
customer experience and seamless data
integration, while reducing costs, time
and risk.
Marco Polo enables the creation of
Trade and Working Capital Finance
applications and modules through a
collaborative co-creation model of the
members.
Successful tested by over 70 organisations.
Recognized by numerous market awards
10
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Current Payables Finance Solutions
Number of Suppliers
Sp
en
d
Tail
Although the tail include over 80%
of all suppliers….Key Challenges in Supply Chain Finance
Source: McKinsey Company
22%
16%
15%
13%
13%
9%
9%
4%
Ease of onboarding Suppliers
Support of suppliers
Ability to analyze spend and working capital
Ability to access credit capacity
Attractive pricing
Accounting Treatment
Ease of use of IT platform
Mulitple banks
48%
24%
14%
7%7% <25
25-100
100-250
250-1000
>1000
….only a small number of suppliers are part
of Supply Chain Finance programs
Source: PWC 2019
4%
21%
34%
13%
13%
13%
1%
Increased demand in emerging markets
Poor credit quality
Complaince constraints
Limited capacity to underwrite
Reduction in correspondent banking
Geopolotical risk
Other
Reasons for Rejections
Source: BNY Mellon
Ease of onboarding suppliers
Compliance constraints
Results
SME suppliers have no
access to current Supply
Chain Finance solutions
Current processes and
solutions don’t allow for
mass onboarding of
suppliers
Current Supply Chain
Finance solutions have
limited effect on reducing
the risk on supply chain
disruptions, social
responsibility, and
supporting the economy
11
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What is required to support SME suppliers?
Keeping businesses, supply
chains, and the economy intact
requires rapid intervention
Pay suppliers faster while preserving your own working
capital.
Provide liquidity for suppliers to reduce risk of supply
chain disruptions.
Mitigate business continuity risk by providing early
payment options to suppliers.
Provide funding sources and additional liquidity to
suppliers.
Key Principles
• Providing easy access to cash
• Stabilize supply chain
• Social responsibility
• Highly targeted and impactful
• Collaborative
Best Solution covering
all key requirements
SME Early Pay also known as Payables Finance, Supply
Chain Finance and Reverse Factoring.
12
Keeping businesses, supply chains, and the economy intact requires rapid
intervention. For the first time, we are developing and bringing financing
solutions to market focusing on SME and global supply chains with leading
partners. Marco Polo Network
“The imperative to Save Our SMEs cannot be understated: this agenda is of
paramount importance to safeguard the current and future functioning of the
global economy and the livelihoods of billions of workers throughout the
world.” ICC COVID-19 Response
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Marco Polo SME Early Pay
Supply ChainFinance
Socially Responsible
New User Experience
Highly Scalable
Fully Digital
Highly Secure
Mass onboarding of 1000+ suppliers
For new and existing Supply Chain
Finance programs
No paper-based and manual process
requirement. Digital platform including digital
agreements and signature.
Simple, fast integration to fully distributed
platform and responsive user interface.
Leveraging Corda blockchain with full auditability
and traceability capabilities with each transaction
verified using complex cryptography.
Supporting businesses that are essential to the
economy and combatting the economic effects
due to the virus, with low-cost financing options.
Integrated Identity Solutions
Digital Passport Public & Private Data
Integrated Payment Solutions
triggered by API
Leveraging the DLT Corda
network of nodes at scale
Single window engagement/on-
boarding process
Leverage the Azure cloud
environment to allow low cost,
global reach deployment of Marco
Polo Platform and Apps at scale
Leverage Accenture’s reach to
the market with their corporate
client contacts
Experienced SPV provider
with track record for Trade
Finance instruments
Distributed Trade Finance
Technology Platform and
developer of trade finance
solutions
13
First time that new technologies and services from leading partners are combined and work together to offer SME-focused Payables Finance.
Fully digital & automated
onboarding (no human touch)
Combination of Partners & Technologies
API connectivity to trade
directory for digital verification
SPV funding under multiple
options MRPA and Notes
Early payment of approved invoice,
not purchase of a receivable
Network of 30+ funders
available to provide liquidity
Alternative payment options
such as virtual cards
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• Buyer uploads approved invoice
• Supplier submits funding request for approved invoice(s)
• Funder submits funding response and supplier accepts it
• Funder pays supplier the invoice amount less a discount
fee for early payment. Invoice ownership is transferred to
funder
• At maturity, buyer pays funder the full invoice amount
1
2
3
4
5
• Maintain DPO and Working Capital
• Standardize payment terms
• Reduce risk in supply chain
• Improve supplier relationships
Buyer Benefits
• A/R↓ DSO↓ Working Capital↓
• Off balance sheet, non-recourse financing
• Leverage Buyer’s strong credit rating
• Certainty of payment (forecasting)
• Visibility into payment details
Supplier Benefits
Process Steps
How does it work?
14
Marco Polo App
Node
Supplier
Corporate Platform
Node
Buyer
Funder Platform
Node
Funder
1
2
3
45
Brand-new onboarding experience
Mass and automated onboarding including
SME suppliers.
Leveraging blockchain
With Corda, retain control of your data with
transaction-level privacy.
Multiple financing options
Different funding structures
available including direct bank
funding and SPV.
Seamless connectivity
Via a single interface and fast integration
with your ERPs and suppliers.
Distributed Platform
No centralized entity and destination
platform controlling financing program.
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Value propositions of Marco Polo SME Early Pay
Buyers
Higher supplier
penetration
Enhance
suppliers’ loyalty &
strengthen supply
chain
Reduce performance
& supply chain risk
by ensuring financial
health of suppliers
Maintain payment
terms & cash on
balance sheet
Multibank network
provides access to
broad funding base
(currencies &
jurisdictions)
Expand existing
Supply Chain
Finance
programs
Suppliers
Access to on-
demand early
payment, enabling
reduction in days
sales outstanding for
all suppliers
Working Capital
optimization and
improved cash flow
Access to
broader
funding
Lower implied cost
of funding for
finance raised
against strong
buyer credit rating
Funders Governments
Mass and quick
supplier onboarding
enabling cost
effective increase of
trade participants SPV structure
allows for Trade
MRPA and Capital
Markets funding
structures
Pro-active
response to
current liquidity
challenges of
SMEs
Pro-active
balance sheet
mgmt with risk
distribution
optionsShort tenors, self-
liquidating assets
through uncommitted
facilities
Ensures liquidity
injected into the
markets can reach
the businesses and
supply chains that
need it most in a
timely manner
Allows supply chains
to continue operating,
ensuring citizens
have access to the
goods and services
they need
Prevents large
numbers of
businesses from
failing, mitigating the
inevitable rise in
unemployment
Governments can
participate directly in
the programs or
support the banks
that inject liquidity
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What is unique to Marco Polo SME Early Pay?
Rapid, Digital Onboarding
Quick and cost-efficient mass onboarding of suppliers through digital and highly automated workflow.
• World-class support
• Digital documentation and signature
• Supplier file upload from buyer
• Leverage Mastercard Track
Low Cost Deployments
World-class managed services that run efficiently and elastically across thousands of participants.
• Multi-tenanted nodes
• Corda Accounts
• Cloud only
• Automated
Simple, Fast Integrations
Simple, fast, and secure integrations into core and back-office systems with ability to get up and
running quickly.
• Support common translations for file formats
• User-friendly documentation• Simple file uploads/downloads from UI
• Enable basic file transfers from ERP
Integrated Payments
Seamless trade and maturity payment process with adequate remittance data to perform simple
reconciliation. • Leverage Mastercard partnership
• Payments triggered by API
• Omni-channel payment rails
• Rapid delivery of funds
16
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Why Join Now?
Support SME Businesses
Introduce a working capital finance solution that helps SME
businesses with additional liquidity.
Network Effects
Encourages the collaboration for new origination channels with
other banks, new products, pilots & new data sources.
‘Active’ Member Status
Influence the direction, help drive the agenda and future strategy.
Going Digital
Supporting digital and automated processes, replacing paper-
based, manual solutions
A few housekeeping tips
Use the Q&A feature to ask your questions
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Q&A
Whitepaper
Working Capital for SMEs
Fighting the Economic Effect of
COVID-19
www.marcopolo.finance
ARE YOU READY TO JOIN THE BLOCKCHAIN REVOLUTION?
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