By Jean-Francois Tapprest and Urban Ljungblom, April 2023.
In our previous articles on the future of document-based trade finance (part one and part two), we described some of the transformations that are shaking the trade industry, from an area notoriously difficult to digitalise towards a mystical digital workspace or integrated ecosystem. We explained that the bulk of innovation is carried out by fintechs which however lack the horizontal dimension in order to connect the end-to-end trade and payment processes. We inquired into who could be the players, or partnership of players, that could build this horizontal dimension and concluded that if participants with complementary sets of capabilities join forces, the likes of Pagero, AON, ERP providers, fintechs and banks, they could have a chance. However, we also reckoned that the large corporations that could make things happen and join the dots are not so interested right now. In the foreseeable future, trade finance will therefore remain fragmented with many players.
We are now zooming-in on the role of banks in the future of trade finance. Will they keep their current position as a financing, trust and risk management provider? Will they build on their strengths or will they disappear in the back-stage?
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