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Oliver Chapman, CEO of supply chain specialist OCI, says that the crisis at SVB shows the importance of diversified funding options and why banks are not always the best option.
Oliver Chapman says:
“SVB was important for more than one reason. Much of the publicity concerning the crisis has centred on the importance of the bank in providing deposit facilities for tech startups that might otherwise have struggled to find a bank willing to provide normal services. Without support from the FED and HSBC’s takeover of SVB in the UK, these deposits may have been in jeopardy.
“But there was more to SVB than a provider of traditional banking facilities to techs without years of trading history. Techs often have complex financial requirements, as indeed do many of the Venture Capitals that fund them. In the small, closely connected world of Silicon Valley and the global tech ecosystem for which it is the core hub, SVB was a key player in providing loans and complex financial services.
“The supply chain is a good example of a complex ecosystem that requires sophisticated financial arrangements. But unfortunately, banks are not always well-placed to understand the unique challenges of the supply chain.
“This is why it is so important companies have a detailed understanding of their supply chain, funding options and, indeed, the importance of funding diversification.
OCI is a procurement partner rather than a supply chain financier. However, since the business has strong sourcing and supplier management capabilities plus logistical operations across all continents, OCI are an obvious go-to for scrambling organisations whether in the physical or digital space.
“Furthermore, there is more to the supply chain than the obvious physical product journey. The digital supply chain is just as important and complex.
“OCI has the financial might to plug some of the funding gaps caused by the plight of SVB and, moving forward, can help organisations understand diversified financial options within both the physical and digital supply chain.”
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