Trade finance and transaction banking knowledge gap exists and is a recognised challenge within the industry. Retaining and attracting new talent into trade and transaction teams of financiers at banks, FIs and non-banks remain critical for championing diversity and innovation within the industry.

Today, Trade Finance Global were at the ITFA 46th Annual International Trade and Forfaiting Conference, held in Budapest, observing the ITFA Young Trade Financier of the Year Award, presented by Duarte Pedreira, Had of Young Professionals at ITFA.

The initiative was set up to recognise the efforts of ITFA Young Professionals in the trade finance industry, allowing them to showcase their ideas and their work for the benefit of the industry.

Young professionals were encouraged to submit projects which are designed to make a significant contribution to the trade finance industry.

What were the projects?

11 projects, from UK, Netherlands, France, Switzerland and El Salvador were submitted to ITFA, shortlisted down to three, which TFG heard from at the conference.

Artificial intelligence to unlock working capital

Soulaimene Ben Lassoued, ING

Factoring volumes continue to grow world-wide, indicating that suppliers are in need of early payment solutions. In the last 5 years, global factoring volumes grew by 25 % and Supply Chain Finance (“SCF” or reverse factoring) popularity substantially increased within the global markets. However, SCF programs still capture a limited portion of buyers’ total spend.

Lassoued’s machine learning tool looks to unlock the full benefits of SCF by using predictive analytics, supported by the buyer’s input in order to provide a tailor-made SCF business case. The tool will assess suppliers’ on-boarding likelihood, estimate cash flow gains and constantly update and refine the on-boarding strategy based on the outcome of the on-boarding process.

A brief guide on Credit Insurance as a risk mitigation tool when used by the banking industry

Matija Vodoplav (BNP Paribas)

Vodoplav has created a brief guide on credit insurance, as a risk mitigation tool when used by the banking industry.

Despite the size of the credit insurance market, it was not easy to find any simple comprehensive guide introducing and explaining all off the relevant aspects of credit insurance. Specific topics may have been covered (e.g. from a specific legal or regulatory view).

Vodoplav’s project started by talking to the industry, discussing the role of trade credit insurance with brokers, lawyers, underwriters and subsequently produced a document, aimed at young professionals and new entrants, which was a guideline providing all of the relevant information about credit insurance. This all needed document covered a 101 on credit insurance, including the rule of ECAs, surety and the meaning of certain policy clauses.

The guide will be published by ITFA in due course.

TFG spoke to Sullivan’s Marian Boyle and Fearne about what credit insurance is; security, policy wording, obligations and what happens when things go wrong. Listen here.

A Guide to Trade Finance

Charlotte Prior (Gulf International Bank), Alero Arubi and Nigel Atta-Mensah (Crown Agents Bank)

This trio of ITFA Young Professionals narrowed in on the trade dilemma, looking at issues between buyers and sellers when it comes to sending and receiving payment, risks and trust. The team looked at some of the key risks around transport, currency, government and financial risk.

The team has produced a series of new content on the ITFA website, based on making trade and understandable and investable asset class, potentially seeking to fill the void of the $1.5 trillion trade finance deficit.

And the winner is…

Charlotte Prior (Gulf International Bank), Alero Arubi and Nigel Atta-Mensah (Crown Agents Bank): A Guide to Trade Finance!