LONDON, September 19, 2019. Trade Finance Global released its third issue of Trade Finance Talks entitled ‘Tradetech & Trade Wars’ – the Sibos edition.
Foreword: Who are Trade Finance Global?
We get asked this a lot, so we decided to answer you here. TFG is the leading trade finance platform. We assist real companies to access trade and receivables finance through our relationships with 270 banks, funds and alternative finance houses. As a proud member of Innovate Finance and an ITFA Fintech, our funding platform is removing the barriers around access to trade finance for companies that need it the most.
To fulfil our purpose to provide ‘trade finance without barriers’, we launched Trade Finance Talks, an award winning educational portal, serving 110k+ monthly readers across 186 countries – covering news and insights across print & digital magazines, guides, research papers, podcasts and video. Better still, it’s free and ungated, for all.
Education is important to us and, for the second year running, we have continued our Student Writer Programme. This year we partnered with FCI Academy, who are providing our student writers with access to the ‘Fundamentals on Domestic and International Factoring Course’. We also launched our WOA Expert Interview Series, featuring 12 subject matter experts on open account finance.
The last decade has seen major industry changes; including increased banking regulation and its unintended consequences for trade finance. The ways in which businesses learn, understand and access trade finance has evolved. TFG’s role in the trade finance market has adapted to meet these challenges – updating the industry on recent rules changes, breaking down complex terminology and, most importantly, providing access to trade finance for the mid-market.
Welcome to our third edition of Trade Finance Talks by TFG: The Fintech Issue.
‘Trade wars are good, and easy to win’ (Donald Trump, Twitter), or not, according to Unicredit’s Dr. Andreas Rees, who we heard from at the 46th Annual Conference of ITFA in Budapest earlier this month. The tit-for-tat behaviour between the US and China has seen trade tariffs increase seven-fold since January 2018. Global trade has shrunk in the past quarter, a highly unusual trend, and the US China fallout is creating a negative spillover to the rest of the world. Are we headed towards a global slowdown? Perhaps. Global central banks have buttressed their foreign exchange reserves with gold, rather than USD. Monetary authorities purchased $15.7bn of the precious metal in the first half of 2019 – the greatest increase in the past 19 years of available data.
There are positives in our outlook, as liquidity providers and fintechs are rising to the challenges in trade. Though some banks are hesitant to embrace the culture of innovation. Yet, according to Merisa Lee Gimpel, Director, Head of Trade Innovation at Lloyds Bank: ‘the culture of innovation means that we should not fear challenges, because when you are experimenting with new propositions, some will undoubtedly be invalidated. We should seek to continuously validate and improve solutions starting early on in the development journey, rather than expect every project we embark on to be a success in its current form’.
Perhaps more banks should have this mindset and be more open to fintech partnerships, embracing potential failure as a chance to turn lessons learned into a better ‘version 2.0’.
To advance trade finance’s digital transformation, financial institutions and technology providers alike are ramping up efforts to cooperate through a number of consortiums. But, to ensure these various initiatives do not create a cluster of “digital islands”, a more joined-up approach is required. We’ll be hearing more at Sibos next week – keep up to date with us on our Sibos hub.
And what about exporters? What should they be doing right now? “It’s the uncertainty that’s killing everything right now” said Imran Arshad, a British exporter and winner of the Queen’s Award for Enterprise – who shared his thoughts on our podcast earlier in the year.
Preparation and risk mitigation strategy is key here. We spoke to George Riddell, Associate Director of International Trade at Deloitte, about his approach. “It’s important to map the trade barriers that you currently face, prioritise addressing those barriers either through optimising their use of existing trade arrangements or looking to new suppliers and markets; and, maintain a dynamic trade strategy, monitoring and updating as there are new trade developments.”
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