Banks are going to great lengths to digitise trade processes while acknowledging the various obstacles to completely removing manual or paper-based transactions.

Six years after the Paris Agreement and the world is still looking for enablers to accelerate the net-zero journey. Many see trade finance instruments as the next significant step but that requires accurate and structured data, robust reporting capabilities, and streamlined processes. Key leading players in the area tell Euromoney what is changing in the world of sustainable trade finance.

Corporate supply chains are facing logistic, shipping and operational challenges while also under pressure from geopolitical tensions and natural disasters, as highlighted by trade leaders at the world’s leading banks in Euromoney’s Trade Finance Survey 2024.

As multinationals navigate the complexities of developing Asian businesses – amid supply-chain reconfigurations, the rise of sustainable financing and the penetration of e-commerce – treasurers are playing a bigger role in strategic decision-making.

The bank is targeting the often-overlooked service sector with structured solutions, along with identifying embedded finance as a fast-growing segment. With the launch of Global Trade Solutions, it goes beyond traditional product offerings and financing.

With corporates taking a more holistic view of sustainability, banks are under pressure to address concerns over reporting and verification requirements for sustainable working capital, trade finance and liquidity management products.

Euromoney recently sat down in Dubai with the heads of investment banking for HSBC in the Middle East. The conversation focused on the burgeoning trade and deal flow between the Gulf region and Asia, what investors on both sides are looking for and why they like what they see.

Will increased transparency in the European corporate bond market lead to higher transaction costs for large trades?

Digital negotiable instruments offer the prospect of improved working capital and better liquidity, but they face implementation challenges.

The decision by the US SEC to drop mandatory Scope 3 reporting weakens global emissions reporting standards. However, many corporate issuers are already using Scope 3 performance targets on sustainability-linked transactions for non-regulatory reasons. Are the debt and equities markets leading companies onto ESG ground upon which regulators fear to tread?

The German lender’s decision to put its chips on southeast Asia is paying off handsomely. Under the leadership of Asia CEO Alexander von zur Mühlen, Deutsche Bank has doubled its capital in Vietnam and Indonesia, with more to come, moved a host of global roles to the region, and has seen Asean eclipse its India and China business in terms of growth and absolute numbers.

There was a big rise in the number of respondents to Euromoney’s Trade Finance Survey 2024 who received an increase in credit from their trade banks last year – 45.7%, up from 41.8% in 2023.

More than 60% of respondents to Euromoney’s 2024 trade finance survey expect an increase in use of trade financing over the next three years.

Some 50.6% of respondents to this year’s Euromoney Trade Finance Survey say the cost of credit from their trade banks has increased over the past 12 months, compared with 45.4% in 2023.

Trade-receivables securitization transactions are flourishing as corporates seek more affordable access to long-term financing.

The commodities firm still needs large banking groups and a range of options when it comes to supporting its operations.

Data hoarding, ESG illiteracy and credit risk are roadblocks for regional banks looking to establish sustainable supply-chain financing programmes in the Gulf, just as COP28 approaches.

While banks have accelerated digital solutions across business lines, accomplishing end-to-end digitalization of global trade remains far beyond their reach. The complexity of supply-chain finance remains a challenge, and banks continue to hunt for scalable solutions. Embedded finance could be the answer.

The inability of trade-finance participants to fully leverage the value of the data generated by transactions remains a source of frustration, particularly for small businesses.

Widespread use of ISO 20022 could have a far-reaching impact on supply-chain finance by facilitating faster processing of transactions.

While foreign investment in China has fallen, supply-chain shift is a different story. Rather than transferring their main production away from China, manufacturers are cultivating deep regional supply chains across Asia and beyond.

Beneath the Great Game geopolitics of US-Vietnam relations, there are some intriguing possibilities in the detail.

For decades, transaction banking was a profitable but largely ignored corner of the banking industry. Then Covid happened. Today, bank chiefs see it as critical to everything they do. Given the challenges ahead – collaborating with fintechs and embedding ESG principles in global supply chains – the revolution under way in this business is unstoppable.

Providers of trade finance remain bullish despite predictions that growth in global trade will stagnate during the remainder of this year.

Banks must address the nature and quality of trade finance roles to address staff longevity concerns.

Sinan Ozcan, senior executive officer of DP World Trade Finance – part of the company that handles around one-eighth of global trade volumes – talks to Euromoney about its plans to finance these volumes as well.

High interest rates and low bank appetite for risk have created the perfect conditions for a renaissance in invoice factoring.

The green transition is boosting demand for key metals and Africa’s commodity markets are under pressure to increase extraction. But buyer awareness of Scope 3 emissions means that processes need to be cleaned up and fast.

Better AML controls across traditional financial systems have increased the appeal of international trade as a conduit for fraud.

Most leading providers of trade finance have welcomed changes to disclosure rules despite research suggesting they could negatively impact demand.