Sibos 2019: SEB launches new environment-friendly product for Nordic SMBs
Swedish corporate bank Skandinaviska Enskilda Banken (SEB) says the largest risk concern for its SMB clients in supply chain financing (SCF) is the environment, shifting from last year’s focus on renewable energy.
For Nordic businesses, the big question is how investments are impacting the climate and vice versa. Suppliers are actively looking for more green and sustainable alternatives such as waste management solutions and reductions in truck usage, having built environmental regulations into their company policies.
To help clients move forward with these priorities, the bank launched a new sustainable SCF product at Sibos London. The product price is differentiated depending on the environmental, social and governance (ESG) score of the supplier, giving suppliers access to discounting invoices.
SEB is based on an export group and therefore traditionally export-heavy. When it comes to year-to-year trends, the bank facilitates rather than starts them for suppliers. By “going down a working mine” with its clients, the bank can create forums with clients where the two can reach a “consensus”, says SEB’s head of investor services Ann Magnusson.
“Sweden is a small country,” says Magnusson, “that’s why we’re used to collaboration to survive.” With 27 million people across four small countries in the Nordics and less than 1% of them now using cash, Magnusson puts this forward-thinking down to the simple fact: “we dare to try things”.
SEB’s head of transaction services Paula da Silva agrees, putting the openness of the company down to the region’s “humbleness” and “less visible egos”.
The pair cite some of the unicorns Sweden has given birth to out of collaborative approaches, including iZettle, which was bought by PayPal for $2.2 billion, and Klarna, which is now valued at $5.5 billion and backed by Snoop Dog.
“People want to open up, it’s too expensive to do everything in-house,” says Magnusson, who praises SEB’s “very entrepreneurial approach”.
Looking overseas, da Silva also points to how the US are tackling environmental concerns. In the absence of government regulation, the US retail sector has caved in to consumer pressure after being called out for the way it destroys certain goods. The shops have taken a noticeable lead in its nation’s care for the environment, realising that the incorporation of sustainability models can actually create more jobs and prosperity internally for the organisations.
As well as the environmental trends SEB is seeing, it’s also seeing the focus on ‘assets as a service’. Clients want to rent rather than sell their products, with cash flows for companies rapidly changing.
“We’re still talking about products in this industry, but it’s much more about services now,” says Magnusson.
As for predicting future trends, the bank have funded PhD students to come into the business and analyse their data and trends to see if they’re missing anything, or whether they can offer a “different angle” which challenges that of the bank’s. This, compounded with clients being brought in earlier to the discussion, is why SEB is able to adapt to each industry sea change.