Find your competitive advantage in trade finance
Open account trade is responsible for around 80% of all international trade transactions with banks playing a minimal role beyond clearing payments.1 This means that there is still plenty of opportunity for banks to grow their trade finance businesses, provided they upgrade their digital strategies and get to market with the products clients are seeking.
New research from Accenture reveals that many banks are struggling to meet clients’ changing requirements due to a mismatch between their trade finance offerings and client needs. Our survey of 675 finance executives in 15 countries also shows that corporate clients are actively reviewing their roster and number of trade finance partners.
This comes at a time when competition from fintechs and non-traditional players is heating up. While banks are currently thriving in trade finance thanks to rising interest rates, there is real danger of losing market share to innovative new entrants and leaving attractive growth opportunities on the table.
Demand for trade finance is booming and rising interest rates are fueling profitability.
The majority of survey respondents are looking to change which and how many trade finance partners they work with, perhaps to address gaps in banks’ product portfolios.
are planning to change their roster of partners in the next 12 months.
will change the number of partners on their current roster.
already have five or more trade partners.
Companies in our survey reported that inventory financing is the product that matters most to them at this time. They agreed that they have a rising requirement for higher pre-shipment finance, a product that is not available from most traditional banks. The research also highlights a growing need for purchase order financing for small to medium buyers and payable finance for multinational corporations.
Companies said they are seeking efficiency and faster turnaround times, more competitive pricing, easier access to credit facilities, and better access to international markets from their providers.
of businesses are willing to receive new trade finance products and services at this time.
Only 16% of companies—most of them larger corporates—report that they are fully digital. Most respondents agreed that manual work, resulting from the complexity of trade finances, is an additional pain point.
Fintechs are positioning themselves to address the gaps currently not met by banks by offering clients flexible access to liquidity and technology-driven due diligence as well as digital processes that enable them to trade internationally. To keep up, we believe there are three key actions banks should consider:
New revenue opportunities and expanded market share await the banks and fintechs that navigate this landscape with the necessary controls, insights. solutions, partnerships and business models. Let’s talk about how we can help you steer through the opportunities of a fast-changing trade finance landscape.