12 Jul GUESTBLOG: BART BANNING – ABN AMRO
Ecosystem fintech and logistics accelerates innovation.
In the truly inspiring world we are living, innovation is affecting all levels of society. For firms in sectors such as finance and logistics, new technology has caused radical changes in their business models. The efficient management of goods (logistics) and financial (banks) flows has gained an additional dimension. Information flows are now an important part of innovation in logistics and in banks. Consumers are now in control of many processes in which they are involved, for example the sharing of bank data with merchants (Retail e- commerce). Also, recent advances in technology have led to a significantly increase of accessible data. An example is Madaster (partner of ABN AMRO), an online platform with information on recyclable and reusable materials in buildings. This additional dimension of information flows increasingly influence the strategic choices firms make in the field of innovations. The current exponential growth of technological innovations creates new perspectives for logistic players and banks on the role they play in the industry.
This digital transition is irreversible, despite recent global cyber attacks. Necessary adjustments need to be made, but this is difficult due to the high speed this transition is evolving. In addition to the desire to participate in opportunities offered by this new economy, there is a need for not losing the existing expertise of the sectors. The emergence of new, small players who take over the role of traditional banks in specific areas has been evolving at a high pace. The acceptance of new technology, the lack of regulation and independence from “internal legacy” from the old world (from which traditional banks are restricted by) are ingredients that lead to the growth of the number of fintechs.
These initiatives (startups) will accelerate by collaborating with other parties. An ecosystem consisting of different experiences, both old and new, offers enormous potential. This is also where fintechs, banks and the logistics sector meet, for the shaping of future financial of logistics chains.
The often mentioned “Supply Chain Finance” is not entirely new; factoring and reverse factoring are financial instruments that have been used for a long time. Blockchain technology will give new meaning to the future within logistics chains. In logistic chains, we see an ecosystem with various parties (shippers, logistics service providers) which are linked in the chain, along with disciplines facilitating the chain (ports, customs, banks, insurers). In this process, information is exchanged transparently and paperless on the basis of online and real-time transactions and physical goods flows. In the Dinalog project “Blockchain & Logistics innovation” ABN AMRO has established a partnership with 16 partners (e.g. Port of Rotterdam, Royal Flora Holland, Transfollow and TU Delft). The goal is to facilitate the increasingly complex international logistics chain through blockchain technology with shorter lead times, faster financial settlement and risk reduction within the chain.
Fintech and logistics are an important combination. In fact, a collaboration enables companies to achieve higher logistic efficiency or better utilization of financial capital. Essential at a time when everything needs to be faster, cheaper but also more sustainable. Finally, at this stage, I would also like to mention the importance of these initiatives for the realization of the next major challenge: the circular economy. Here, expertise of fintech, logistics and shippers are required for the development of reverse logistics and to close chains wherever possible for optimal reuse of raw materials.
Bart Banning has been working for ABN AMRO for over 30 years. For the last 8 years as Sector Banker Transport and Logistics, he held the sector responsibility and was directly in contact with companies that focus on the implementation of logistics activities. He is also involved in initiatives in the field of themes such as sustainability, innovation and changing business strategy. Internally, he works closely with colleagues who are responsible for relations in the Transport and Logistics sector within the ABN AMRO sector bank. The common goal is to build a sustainable portfolio and to work with companies that have a clear strategy and vision of their changing position in the chain.