HSBC enters new supply chain finance partnership
GT Nexus’ supply chain management platform provides companies with end-to-end connectivity, visibility and collaboration with suppliers, customers and other supply chain partners, helping them to optimise the flow of goods, funds and information from order to final payment.
With the new collaboration, financing capabilities will be integrated to the platform for HSBC’s US clients, easing the access to funds along the line and helping companies to free up working capital.
It’s far from the first partnership that HSBC has formed to improve its supply chain offering. Speaking to GTR, Vinay Mendonca, HSBC’s global head of product and propositions, global trade and receivables finance, says the bank is already working with a number of different platforms such as PrimeRevenue and Kyriba.
Just a few months ago, the bank also announced it had joined forces with Tradeshift, a San Francisco-based business networking firm, whose platform connects more than 1.5 million companies globally.
Mendonca says that “in essence” the GT Nexus and Tradeshift platforms are “fairly similar in terms of what they look to achieve for their clients”, although there are some differences in functions and capabilities, as well as the sectors, areas or client profiles they target.
The partnership with GT Nexus is a step HSBC has taken to meet demand from some of its US customers, who were already using the platform.
“Large clients may work with a couple of different providers in this space, like Tradeshift or GT Nexus. It is a client decision which platform they use. We want to make sure that we, through strategic partnerships, are there to support them and their suppliers as they get onto these platforms,” Mendonca says.
The bank has over the past couple of months been piloting the GT Nexus platform with one client in the US, an apparel retailer. The offering will initially be made live for HSBC customers based in the US, but could be expanded geographically in the future, Mendonca explains. “The good thing with these cloud-based solutions is that they can be quite easily replicated to different geographies without much work.”
While supply chain finance is an area HSBC sees a big potential for growth, the bank is also looking to offer pre-shipment finance through the platform, at a later stage. Another capability it is investigating is how to leverage the data of the platform to the benefit of its clients.
“There’s a massive amount of data that these platforms offer, because they’ll have the history of performance between the buyers and the supplier. That’s data that can be used to better manage risk and therefore extend better pricing to the client and their suppliers. That’s something we can see coming down the innovation roadmap,” Mendonca says.
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