The $32 trillion global trade industry is foundational. World leaders increasingly look to trade to drive development in the face of a growing population and lacklustre growth. 

Despite the hopes that it may fuel the future, trade is in many ways stuck in the past. An estimated 80% of global trade transactions still rely on paper documents, with a single shipment involving up to 36 original documents and 240 copies moving across 30 or more parties.

This makes global trade slow, cumbersome, risky – and, crucially, expensive, which inhibits access to trade finance for small and medium-sized enterprises (SMEs). Trade digitisation is increasingly emerging as the solution, promising to both remove risk and improve financial access.

Two leaders in the trade digitisation field – Anastasia McAlpine, Head of Product, Trade and Supply Chain Finance at Finastra and Satyam Agrawal, MD – Global Head of Banking-as-a-Service (BaaS), SME and Analytics at CredAble – met to talk about the trouble with digitisation and what their respective institutions are doing to bridge the gap. 

An SME focus, finally

While most focus on the inefficiencies and vulnerability created by paper documents, a key issue for banks is expense. Because a single letter of credit can take over a month to be processed and cause high costs, “banks generally have a cut off that means they would not process invoices below a certain threshold” – meaning SMEs miss out on financing, said McAlpine. 

As legal frameworks – like the UN’s Model Law on Electronic Transferable Records – and digital platforms become more prevalent, the shift from paper to platforms is accelerating, facilitated by collaborations between fintechs and banks.

SMEs are “the backbone of world economies,” said McAlpine: increasing SME support will be a major trend in 2026 and beyond, without which global development is doomed to stall. Managing risk, speed, and cost of SME financing – for example, through targeted credit processes and improvements in efficiency – can reduce costs and complexity, making it possible for banks to offer more financing.

As sustainability and resilience to geopolitical shocks cement themselves in the minds of banks and corporates alike, digitisation will become even more important to maintain resilience.

Finding the right fit

Even when SMEs do get access to trade finance, it might not be quite the right kind, mostly due to gaps in access and interoperability. Increasing access sometimes can just mean building the infrastructure to improve connectivity, said McAlpine: “There’s a lot of great solutions out there, but the dots are not always connected.”

Digitisation and interconnectivity are most powerful when they are end-to-end, encompassing the entire transaction lifespan. This means “minimising manual inputs, automating as much as possible, which in turn reduces the risk, reduces the time, reduces the cost, and helps propel trade forward,” explained McAlpine. 

Finastra’s open API approach makes it possible for banks to connect to third-party firms and leverage their existing infrastructure to provide new services at lower costs, which can be a game-changer for SME access. Finastra’s partnership with CredAble is doing just that, bringing two solutions together for end-to-end digitisation.

Getting on board

This can also simplify one of the aspects that have historically acted as the biggest barrier to finance inclusion: onboarding. Taking on new clients is by far the most laborious and time-consuming aspect of a trade finance transaction for banks, meaning many will only go through the hassle for big companies that bring big transaction volumes. 

While “light touch” onboarding processes have been gaining some steam, digital platforms can solve the problem on a scale. “Platforms like CredAble try and solve for each program level: we can very quickly define the supplier onboarding requirements, pull in the data either from the ERP of the anchor corporate or from digital public infrastructure and fast-track that entire process, which helps with the scalability of the programming,” said Agrawal. 

For banks, supplier and customer onboarding can also be massively simplified by – you guessed it – artificial intelligence (AI). AI can help analysts make better credit assessment decisions, improving on rather than replacing human expertise. In transaction processing, another traditionally cumbersome area, AI can streamline operations by checking thousands of invoices for fraud and duplicate invoices near-instantaneously. 

DPI democratisation

A much less-discussed, but equally important, development in the trade digitisation industry is the rise of digital public infrastructure (DPI). India, the world’s most populous country and one of its fastest-growing major economies, has one of the world’s best DPI stacks, said Agrawal, which enables the banking world to nimbly navigate digital identities and newly founded businesses.

CredAble, which is headquartered in India, uses DPI to help banks simplify their KYC processes, checking a wide range of aspects from customs and shipping data to direct and indirect tax contributions. This, again, vastly simplifies onboarding processes, giving banks more confidence about their clients.

“Imagine the power of that information that you’re sitting on to enable any form of financing for SMEs: it means that you know not just the business you’re dealing with, but also that you know their buyers, you know their suppliers, you know the exact amount that they’ve transacted and when it was transacted,” said Agrawal. 

Document checks are also made vastly easier by DPIs: invoices, for example, can be immediately validated against a government database, meaning banks have both an initial and an ongoing trust in the client and its operations. 

Looking ahead, “the pace of adoption will be different, but I would imagine that is going to be the future, and every organisation in supply chain financing or in lending will start leveraging it in some shape or form,” predicted Agrawal.

Stronger together

Finastra and CredAble’s partnership marries Finastra’s backend processing innovation with CredAble’s front-end origination power to provide a truly end-to-end supply chain finance solution. The timing has never been better: as SMEs clamour for – and get – increased access to trade finance, mid-tier banks are also increasingly joining the game, leveraging tools like Finastra and CredAble’s to stay ahead. 

“This creates market dynamics where banks look to diversify their portfolios and not just focus on traditional documentary trade but also try to support their corporate customers with supply chain finance solutions, so access to efficient supply chain finance best-in-class functionality is quite a critical goal,” said McAlpine. 

Using third-party solutions providers makes it easier for banks to see immediate gains from digitisation, but the benefits extend beyond that as well. In the long term, updates or improvements become much easier as external platforms are far more agile and used to future-proofing their systems. 

The next frontier

For solutions providers, the next challenge is deep-tier supply chain finance, a famously tricky financing mode that involves an anchor corporate and several suppliers downstream in a supply chain. While crucial for financial inclusion, common issues cluster around flexibility, risk appetites, and diverging incentives. Finastra is exploring a solution that could streamline the process by implementing tokenisation and creating opportunities for arbitrage.

ESG is another fast-developing aspect in the industry that Finastra and CredAble are tackling through digitisation. Finastra’s recent collaboration with TradeSun’s CoriolisESG provides dynamic ESG scoring that gives banks visibility on their sustainability impact on a transaction-by-transaction basis. 

—

As digitisation becomes de rigueur in trade finance, digital platforms are racing to provide banks with ways to take advantage of its many benefits.