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Blending Digitisation and Sustainability to Do Better Business

Over the past two years, we have seen how Covid-19 has been a catalyst and accelerator of digital innovation. Treasurers have been at the forefront of this development.

Over the past two years, we have seen how Covid-19 has been a catalyst and accelerator of digital innovation. Treasurers have been at the forefront of this development. On one hand, they have harnessed digital technologies to centralise visibility and control over cash, automate processes and gain greater insights into liquidity and risk. On the other, they have stepped up to support new digital business models, integrating new payment methods to enable customer-centric eCommerce.

Sustainability as a measure of business success
But just as the pandemic has emphasised the social and commercial value of digital technologies, it has also inspired consumers, businesses and governments to prioritise social and environmental impact as a measure of business success. This has led to a rapid elevation of ESG priorities as part of corporate strategy, including treasury. These parallel trends of digitisation and sustainability are not competing, but can be mutually beneficial. The potential impact of combining digitisation and sustainability is nowhere more apparent than in Africa, a continent in which Standard Chartered offers unrivalled coverage, comprehensive solutions and on-the-ground expertise. Our vision is to be the world’s most sustainable and responsible bank, embedding sustainable practices through our business, operations and communities.

Drivers of growth in Africa
Digital commerce was already gaining traction in Africa before Covid-19, with the Worldpay by FIS Global Payments Report, 2022 reporting 35% CAGR in eCommerce in Middle East & Africa (MEA) between 2016-2020, albeit from a relatively low base. However, this trend has accelerated in Africa just as it has in other regions as lockdowns took effect, accelerating the use of digital payments, particularly using e-wallets, and the decline of cash. Today, the same report notes that eCommerce is expected to nearly double from US$55 billion in 2020 to $109 billion in 2024. Nigeria has been particularly notable, as the fastest-growing eCommerce centre in Africa (predicted 24% growth 2020 – 2024) and is host to regional digital leaders such as payments innovator Flutterwave and eCommerce platform Jumia.

Treasurers’ role in the digital economy
Treasurers are playing a key role in the shift towards digital payments and new business models, embracing new payment methods and integrated connectivity to give customers an excellent experience, and make both incoming and outgoing payments faster, more convenient, secure and cost-effective. At the same time, digital technologies are also providing treasurers with better visibility over cash, and access to innovative liquidity solutions to manage cash across currencies and borders in an automated way.

Data and digitisation for sustainable supply chains
While digital technologies are playing a major role in enabling efficient payments, cash and treasury manager, they are also a catalyst for values-led solutions, such as sustainable supply chain finance (SSCF). SSCF adds a further dimension to traditional supply chain finance programmes by incentivising sustainable business practices through favourable financing rates. This is only possible through sophisticated data exchange and connectivity to combine supplier data, independent sustainability metrics and automated banking solutions. Likewise, deep tier SSCF is helping companies to propagate their sustainability goals further into their supply chains, including to smaller suppliers and farmers.

Building growth and resilience across communities
These solutions have particular resonance in Africa given the contribution of trade and supply chain finance to economic development. The African Development Bank estimates Africa’s trade finance deficit at between $110 billion and $120 billion, equivalent of 25% of the demand for trade finance in the continent, with smaller businesses particularly disadvantaged. Through a combination of innovative financing techniques, strategic partnerships and digital technologies to bring supplier ecosystems together, obstacles to trade – and in particular, sustainable trade – can be overcome, encouraging growth and greater economic, environmental and social resilience.

Key points:

  • The growth of digital commerce in Africa, and an increased focus on sustainability amongst corporations and investors, offer significant potential for economic growth and resilience
  • Treasurers are contributing towards sustainable growth and inclusion through innovative payments and financing solutions
  • Sustainable supply chain finance, including deep tier financing, helps incentivise good governance, high environmental standards and fair treatment of employees and communities throughout supply chains

Find out more about how Standard Chartered is helping treasurers to digitise their business and fulfil social and environmental commitments:

Standard Chartered Business Innovation Series
Standard Chartered Bankable Insights