Working with Bank of America, POSCO was able to launch its supply chain finance program seamlessly. Though POSCO's overseas subsidiaries had previously implemented supply chains finance programs, this was POSCO's first cross-border supply chains finance program based out of South Korea.
Created scalability. POSCO's supply chain finance program included an ability to expand to as to cater to increased volume. The program included a risk distribution model that was able to tap capacity from other banks so POSCO could continue discounting invoices without disruption as requirements increased.
Strengthened relationships with suppliers. The program helped POSCO strengthen relationships with suppliers by helping suppliers enhance their own working capital. Suppliers could choose early payment at a favorable rate based on their own receivables. This in turn helped them improve their ability to forecast cash flow.
Streamlined operations. POSCO’s treasury team wanted a local client service team to handle the program on a day-to-day basis so Bank of America’s Seoul office took on servicing and delivery. This helped create efficient, streamlined processes, which were all in the same time zone and in the local language.
Enhanced connectivity. While POSCO had already established connectivity with BofA via CashPro Connect, it wanted the program to be flexible - and to give the other buying entities and suppliers the flexibility to connect to BofA via their preferred channel (online, direct connectivity including manual with enhanced security measures).
Bank of America understands how important this venture is for POSCO and, by helping set up the cross-border supply chain finance program, is helping improve its Physical Supply Chain.