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Global Trade Finance Market – Growth, Trends, COVID-19 Impact, and Forecasts (2022 – 2027) – GlobeNewswire

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New York, April 22, 2022 (GLOBE NEWSWIRE) — announces the release of the report “Global Trade Finance Market – Growth, Trends, COVID-19 Impact, and Forecasts (2022 – 2027)” –
About 80 to 90% of world trade relies on trade finance which includes trade credit and guarantees. Exporters and importers from least-developed countries tend to pay very high fees, which increases their costs of trade while traders from developed countries benefit from low-interest rates and fees provided by international banks.

Lending And Factoring done in the trade finance market is mostly short term in nature. But the coverage of trade finance is not uniform. Technology adoption in trade finance has brought structural changes to the way trade happens globally today. With the use of open APIs, what were traditionally closed systems are now bringing in other capabilities to extend their offerings.

2019 has seen a mix of instability in the macroeconomic and geopolitical landscape. US-China Trade War and Brexit have taken their toll on the market. An estimated 420 billion USD loss in exporter revenues. In 2020, the pandemic has created an ever-lasting impact on the way business is conduct across the globe. Coupled with the scarcity of financing in general, and trade financing in specific, coronavirus is causing serious damage to developing economies. The least-developed countries have been hard hit economically, as borders are closed to trade and tourism. In addition, post COVID-19, holistic trade finance approach and technology is expected to be the preferred option for various companies to fight against such pandemic situations in future and to predict the possible situations before it happens.

Key Market Trends

Banks in the Service Providers Segment Dominate the Market

Corporate banks actively intermediate trade transactions, and in recent years competitive pressures have pushed them to become more efficient and offer more effective services. Trade finance is dominated by banks, with HSBC Holdings PLC, Citigroup Inc., Standard Chartered PLC, BNP Paribas SA, JPMorgan Chase & Co. and Deutsche Bank AG being among the largest providers, though the market has attracted a growing number of technology-led platforms and capital market investors in recent years. A supply chain finance program is typically set up by a corporate buyer with a bank or alternative finance provider to offer suppliers early payment on their invoices. This part of banks’ trade finance business is already going through a significant growth spurt: Bank of America Corp., for one, has seen an increase of roughly 200% in the number of invoices being financed through such programs in the first year of the pandemic. Not only did the bank increase the number of programs it finances, but it also expanded existing ones to cover more suppliers. While lockdowns and travel restrictions in 2020 took a heavy toll on trade and those that finance it, industry revenues are on track and reached pre-pandemic levels in 2021. In the first six months of 2021, the world’s 10 largest transaction banks recorded a 6% year-over-year increase in revenues from trade finance. Banks will have to speed up digitalization efforts and innovate their products and operating models if they are to capture the opportunity as competition from nontraditional providers intensifies.

United States Dominate the Market in North American Region

In the United States, cutting-edge technology is playing an increasingly important role in trade financing. During the projected period, the integration of blockchain technology in trade finance is expected to generate attractive trade finance market opportunities. The demand for safety and security in trading activities, as well as a boom in the adoption of trade financing by SMEs, increased competition, and new trade agreements, are all driving the growth of the trade finance sector in the United States. Multinational firms in the United States have begun to employ digital technologies that promise increased supply-chain efficiency and transparency, as well as the creation of new digital networks to enable trade and finance. The rising total value of the country’s international trade imports and exports is driving the market.

Competitive Landscape

The report includes an overview of the competition in the trade finance market along with a brief on merger & acquisition deals that took place in recent times. It includes company profiles of not only banks but also a few trade finance companies and trade tech companies in the market space. Currently, some of the major players dominating the market are listed below.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support
Read the full report:

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