Value optimisation in the financial value chain involves maximising liquidity, reducing costs, managing risks, and improving stakeholder outcomes across every financial interaction. It is not just about saving money but about making the financial ecosystem more efficient, resilient, and profitable.
The financial value chain describes the flow of money and financial processes across a business ecosystem. It spans from procurement and payments to financing, risk management, and returns, involving multiple players who are suppliers, customers, banks, investors, regulators, and others.
Value optimisation is about ensuring that every step in the financial value chain delivers maximum benefit with minimal cost, risk, and minimal inefficiency. It focuses on extracting, preserving, and enhancing financial value across transactions and relationships.
The dimensions of value optimisation in the financial value chain include working capital optimisation. This involves the efficient management of receivables, payables, and inventory. An example is the use of supply chain financing or dynamic discounting to improve liquidity. Supply chain financing and dynamic discounting are two complementary tools businesses use to improve liquidity and optimise working capital across the value chain. In supply chain financing, the buyer approves an invoice from the supplier, a bank or financing institution pays the supplier early less a small fee, and the buyer pays the financier at the original or extended due date. In dynamic discounting, the supplier issues an invoice, and the buyer offers to pay earlier than agreed terms if the supplier accepts a discount. Supply chain financing shifts liquidity benefits through external financing, while dynamic discounting leverages internal liquidity to strengthen the supply chain.
Another dimension of value optimisation is cost efficiency which results from streamlining processes like procurement, invoicing, and payment reconciliation. Example is digitising payments to reduce manual errors, banking fees, and fraud risks. Digitising payments is one of the most effective ways organisations, governments, and businesses can improve efficiency, strengthen security, and optimise costs in their financial operations. By digitising payments, organisations minimise human mistakes, cut down fees tied to manual or bank-dependent processes, and reduce vulnerabilities to fraud — all while improving liquidity visibility and operational efficiency.
Next is revenue enhancement by leveraging financial data to identify profitable customer segments or pricing opportunities. Example is cross-selling financial products or offering customer credit responsibly. Both cross-selling financial products and responsible customer credit are important strategies for improving customer value while maintaining financial health. Cross-selling financial products can be seen in a bank offering insurance to loan customers, a mobile money provider offering savings and micro-loans or a pension scheme bundling micro-health insurance. Cross-selling deepens customer relationships and diversifies revenue, while responsible credit ensures long-term trust, portfolio quality, and financial stability. Together, they help build sustainable financial ecosystems that benefit both providers and customers.
The next value optimiser is risk reduction by hedging against interest rate, exchange rate, or credit risks. Example is when exporters use forward contracts to protect foreign exchange income. It goes into how exporters manage currency risk so that their foreign income is predictable and protected from exchange rate swings. As an instance, an exporter signs a forward contract with the bank which agrees to sell, say, $100,000 in three months at ₦1,500 per dollar as today’s forward rate. After three months, regardless of the actual exchange rate, the bank must buy the $100,000 at ₦1,500 per dollar, giving the exporter ₦150 million. The result is that the exporter’s income in local currency is protected or hedged. Exporters use forward contracts to lock in exchange rates and guarantee their local-currency income, shielding them from foreign exchange volatility and ensuring financial stability, though at the cost of giving up potential gains if rates move in their favour.
Another is capital structure optimisation through balancing debt and equity to minimize cost of capital while maintaining flexibility. Example is when Nigerian SMEs combine bank loans with angel financing to reduce dependence on expensive overdrafts.
Next is technology and process innovation by automating accounts payable or receivable with Enterprise Resource Planning or fintech platforms. Example is the mobile money adoption in rural Nigeria lowering transaction costs. Mobile money adoption in rural Nigeria reduces transaction costs by cutting out travel, lowering fees, and minimising risks, while also creating a gateway for deeper financial inclusion and rural economic growth.
Last but not the least dimension of value optimisation is stakeholder value alignment by ensuring suppliers, buyers, financiers, and regulators all benefit sustainably. Example is Shared Agent Network Expansion Facility (SANEF) improving inclusion while reducing bank branch costs. As a practical example in Nigeria, before optimisation, a distributor pays suppliers late, holds excess inventory, and relies on costly bank overdrafts. However, after optimisation, with supply chain financing and digital payments, the distributor pays suppliers early at a discount, reduces inventory with better forecasting, and uses cheaper invoice financing. The result therefore is improved liquidity, lower financing costs, stronger supplier relationships, and better profitability.
Over all, economic entities who must achieve set goals apply value optimisation.
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