Trade finance refers to the process of financing international trade flows. Trade finance assists in diminishing or mitigating the risk associated with international trade transactions. There are two players involved with a trade transaction, one an exporter, and the other one an importer. Trade finance is all about financing for the purpose of trade and it is related to both international and domestic trade transactions. Growing importance of international trade is likely to foster growth of the global trade finance market over the timeframe of analysis, from 2020 to 2030.
Insurance, bank guarantees, export financing, credit agency, receivables and invoice financing, and providing letters of credit (LCs) are all provided by trade finance. Exporters, importers, manufacturers, sellers, and buyers utilize it for the purpose of easing financing activities and it deals in the manner assets, investment, credit, and cash are utilized for trade. The ability to accelerate the procedure of making arrangement of short-term finance is likely to support growth of the global trade finance market in the years to come.
Product, service provider, end user, and region are the four important parameters based on which the global trade finance market has been classified.
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Global Trade Finance Market: Notable Developments
One of the relevant and important developments of the market that gives a quick view of the dynamics pertaining to global trade finance market is mentioned as below:
- In July 2019, American multinational bank, JPMorgan Chase & Co. acquired leading healthcare payments solutions provider, InstaMed Holdings, Inc. The latter is estimated to function as JPMorgan Chase Bank’s subsidiary. With the acquisition, it is expected that the clients of both JPMorgan Chase and InstaMed will be benefitted from this strategic move
Some of the prominent organizations in the global trade finance market comprise the below-mentioned:
- Royal Bank of Scotland
- Bank of America
- JPMorgan Chase & Co
- Mizuho Financial Group, Inc
- BNP Paribas S.A
- Mitsubishi UFJ Financial Group, Inc
Global Trade Finance Market: Key Trends
The global trade finance market is characterized by the presence of the following restraints, drivers, and opportunities.
Integration of Advanced Technologies into Trade Finance Activities to Boost Demand
The growth of the global trade finance market is likely to be driven by the rising import and export activities across the globe. Integration of latest technologies such as quick response (QR) codes, radio frequency identification (RFID), and optical character recognition (OCR) technologies are likely to bolster growth of the global trade finance market in the forthcoming years. QR codes are used to track and identify shipments and OCR technology is utilized for the purpose of reading numbers of containers. Growing digitization is likely to work in favor of the global trade finance market over the timeframe of analysis, from 2020 to 2030.
Increased implementation of pricing and structuring methods along with strategic development is anticipated to foster development of the global trade finance market over the timeframe of analysis, 2020 to 2030. Utilization of technologies such as internet of things (IoT), machine learning (ML), and artificial intelligence (AI) in commercial finance is likely to augur well for the market in the years to come.
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Global Trade Finance Market: Geographical Analysis
Asia Pacific is estimated to be one of the most dominating forces in the global trade finance market over the timeframe of analysis, from 2020 to 2030. Increased funding from the government is anticipated to add to the development of the global trade finance market over the tenure of analysis, from 2020 to 2030. China is likely to remain at the forefront of the growth of the market in Asia Pacific.
This study by TMR is all-encompassing framework of the dynamics of the market. It mainly comprises critical assessment of consumers’ or customers’ journeys, current and emerging avenues, and strategic framework to enable CXOs take effective decisions.
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