In this, the last of my SIBOS-inspired blogs, I cover Trade Finance where digitization is picking up pace rapidly.
Trade finance and trade services are manual and paper-intensive processes. As such, it is no surprise that digitization of trade services is becoming a key topic of discussion for banks this year. Trade finance is moving into the digital realm and a growing number of technologies are now supporting banks and corporations in realizing new efficiencies.
Though the concept of trade digitization has been around for a while, its pace has quickened recently due to increased corporate demand. In particular, the electronic bill of lading is a key area of focus to digitize the trade finance process, allowing information on traded goods to be shared by parties across the supply chain. Distributed ledger technology has a potential role to play in sharing and validating information across the supply chain, and the blockchain discussions apparent at Sibos for trade processes are likely to develop into solutions over time.
In concert with digitization, a big driver of change is an increased focus on compliance in trade finance. Digital solutions can help reduce errors and improve record keeping, and they can also aid risk management, sanctions screening and fraud management in supply chain processes.
As banks recognize and address the need for change, individual corporates must also analyze their own needs and make their own business cases for joining the digital revolution. New technology is fast overcoming the technical challenges in trade finance and gaining critical mass, with the potential to benefit banks, corporates and of course, international trade.
- Accuity: Combination of data and technology to help mitigate trade-based money laundering risk.
- Misys Fusion Banking Trade Innovation: Supports both traditional trade and supply chain finance on a single platform for business transformation.
Catch up on previous posts from this series: