Finastra launches supply chain finance product for banks

Finastra has launched a supply chain finance product for banks that links with its Trade Innovation and Loan IQ platforms.

Called Finastra Supply Chain Finance, the offering is aimed at banks seeking to expand working capital services across payables and receivables finance. It connects trade, lending and supply chain finance processes through Finastra's Nexus API suite, allowing integration with existing systems and external partners.

The platform covers the full process, from buyer and supplier acquisition and onboarding to fulfilment, servicing, risk management and secondary market distribution. Its first release also includes native risk distribution, allowing banks to move assets through secondary markets with automated pricing, limit management and reconciliation.

The launch adds another product line to Finastra's trade and lending software portfolio. By linking the new service to Trade Innovation and Loan IQ, Finastra aims to give banks a single framework for managing limits, exposures and data across letters of credit, guarantees, loans and supply chain finance.

Working capital

Banks have been looking for ways to expand fee and lending income from corporate customers while keeping tighter control over compliance and credit exposures. Supply chain finance has become one area of focus because it can give both buyers and suppliers access to liquidity tied to trade flows and invoices.

The system supports straight-through processing and can connect with enterprise resource planning systems and trade ecosystem partners through APIs. It is also designed to handle large transaction volumes, including thousands of counterparties and millions of invoices, with real-time servicing.

The product is available through several deployment models, including on-premise and software-as-a-service. Finastra says the system is built on a cloud-native architecture and includes AI-based tools for fraud detection, compliance screening and eligibility monitoring within operational workflows.

Portfolio strategy

The launch is part of Finastra's broader effort to develop Trade Innovation into a more modular, API-led platform. Financial institutions use Trade Innovation to automate trade finance workflows, and Finastra has been extending its role so it can work more closely with lending products such as Loan IQ.

That approach reflects a wider trend among banking software providers to bring separate product lines together around commercial banking clients. Corporate treasurers and bank relationship teams often want trade finance, lending and working capital tools to share data, exposure information and client onboarding processes rather than operate as isolated systems.

For banks, a linked platform can reduce duplication in operations and improve visibility across customer relationships. It can also make it easier to distribute risk, particularly when institutions want to move supply chain finance assets off balance sheet or share them with other investors.

Vinay Mendonca, Head of Product, Trade Supply Chain Finance and Corporate Channels at Finastra, said the launch is intended to help banks bring working capital solutions to market more quickly.

"Banks are looking for ways to bring new working capital solutions to market faster to capture new revenue streams delivered through STP journeys, and lower costs, while addressing operational risks and regulatory complexity," he said.

He added that the product is designed to sit alongside Finastra's established systems.

"By combining new supply chain finance capabilities with Trade Innovation and Loan IQ, we're enabling banks to take a more connected approach to working capital. This launch marks an important milestone in the evolution of our Trade Innovation platform as we look to bring more API, AI and cloud-led innovation to the market, leveraging our deep expertise in the trade domain, to help institutions innovate and grow," Mendonca said.

Later releases are expected to add purchase order finance, pre-shipment and post-shipment finance, inventory finance, distributor finance and other working capital products.