About Trade Finance
Global and local bank support international trade through a wide range of products to help the customer manage their payment and associated risk. Trade Finance deals with monetary activities related to commerce and international trade. In this, Trade finance introduce the third party to the transaction to remove the payment risk and supply risk according to the agreement. It provides a means which turn the export opportunity in sales and get paid on time and effectively manages to mitigate or reduce the risk involved in an international trade transaction. Various intermediaries such as banks and financial institutions facilitate the transactions by financing the trade. It then, allows you to protect against international trade unique inherent risk as currency fluctuation, political instability, issues of non-payment and other. According to the International chamber of commerce (ICC) report, world trade flow will grow at an annual rate of about 4.3% and nearly reach USD 19 Trillion by 2020. The majority of this trade is driven by global infrastructure development which is expected increase due to rise in population and urbanization
Attributes | Details |
---|
Study Period | 2018-2030 |
Base Year | 2023 |
Unit | Value (USD Billion) |
CAGR | 4.54% |
Competition among existing players is due to the Trade Finance market share occupied by leading players. The industry leader is engaged in offering innovative and superior quality products to cater to the ever-growing demand for Trade Finance market. The companies are implementing strategic activities such as acquisitions and mergers along with collaboration with companies in other industries to aid them in improving sustenance and maintaining their competitive advantage. Analyst at AMA Research estimates that United States Players will contribute the maximum growth to Global Trade Finance market throughout the forecasted period. Established and emerging Players should take a closer view at their existing organizations and reinvent traditional business and operating models to adapt to the future.
Societe Generale (France), China Exim Bank (China), BNP Paribas (France), Citigroup (United States), JPMorgan Chase & Co (United States), HSBC Holdings PLC (United Kingdom), Mitsubishi UFJ Financial (Japan), Credit Agricole (France), Bank of America Merrill Lynch (United States), Standard Chartered (United Kingdom), Euler Hermes (France), Asian Development Bank (Philippines) and Royal Bank of Scotland (United Kingdom) are some of the key players that are part of study coverage. Additionally, the Players which are also part of the research coverage are ICBC (China), Mizuho Financial Group (Japan), Commerzbank (Germany), Bank of Communication (China), ANZ (Australia), Afreximbank (Egypt), Export-Import Bank of India (India), AlAhli Bank (Saudi Arabia) and EBRD (United Kingdom).
Segmentation Overview
AMA Research has segmented the market of Global Trade Finance market by Type (Supply Chain Finance, Letter Of Credit, Structured Trade And Commodity Finance, Export And Agency Finance and Trade Credit And Political Risk Insurance), Application (Finance, Energy, Power Generation, Transport, Renewables, Metals & Non Metallic Minerals and Other) and Region.
On the basis of geography, the market of Trade Finance has been segmented into South America (Brazil, Argentina, Rest of South America), Asia Pacific (China, Japan, India, South Korea, Taiwan, Australia, Rest of Asia-Pacific), Europe (Germany, France, Italy, United Kingdom, Netherlands, Rest of Europe), MEA (Middle East, Africa), North America (United States, Canada, Mexico). Europe region held largest market share in the year 2023. Asia Pacific, on the other hand, stood as the second largest market due to the presence of key companies in the region and high technological advancement. If we see Market by Service Providers, the sub-segment i.e. Banks will boost the Trade Finance market. Additionally, the rising demand from SMEs and various industry verticals gives enough cushion to market growth. If we see Market by End user , the sub-segment i.e. Exporters will boost the Trade Finance market. Additionally, the rising demand from SMEs and various industry verticals gives enough cushion to market growth.
Influencing Trend:
Adoption of Futuristic Supply Chain Technology and Adoption of Structuring and Pricing Tools
Market Growth Drivers:
Mitigate Risk from Suppliers, Involvement of Clearing House and Trade through Financial Market Integration and Efficiency in Trade and Supply Chain
Challenges:
Manual Handoff Increase Complexity in Tracking and Limit Efficiency, Change in Economic and Political Condition and Nonpayment or Delayed Payment by Foreign Buyers
Restraints:
Stringent Regulatory & Financial Crime Compliance
Opportunities:
Diversifying Customer Portfolio
Market Leaders and their expansionary development strategies
In January 2022, MODIFI has acquired Seawise Capital’s trade finance and SaaS business in India. The transaction relates to the future business of the Seawise portfolio.
In February 2024, Finastra, a global provider of financial software applications and marketplaces, and Tesselate, a global digital transformation consultancy and integrator, announced the launch of an end-to-end pre-packaged service for faster and easier trade finance digitalization.
Key Target Audience
Local & International Banks, Custom Bodies and Export Traders
About Approach
To evaluate and validate the market size various sources including primary and secondary analysis is utilized. AMA Research follows regulatory standards such as NAICS/SIC/ICB/TRCB, to have a better understanding of the market. The market study is conducted on basis of more than 200 companies dealing in the market regional as well as global areas with the purpose to understand the companies positioning regarding the market value, volume, and their market share for regional as well as global.
Further to bring relevance specific to any niche market we set and apply a number of criteria like Geographic Footprints, Regional Segments of Revenue, Operational Centres, etc. The next step is to finalize a team (In-House + Data Agencies) who then starts collecting C & D level executives and profiles, Industry experts, Opinion leaders, etc., and work towards appointment generation.
The primary research is performed by taking the interviews of executives of various companies dealing in the market as well as using the survey reports, research institute, and latest research reports. Meanwhile, the analyst team keeps preparing a set of questionnaires, and after getting the appointee list; the target audience is then tapped and segregated with various mediums and channels that are feasible for making connections that including email communication, telephonic, skype, LinkedIn Group & InMail, Community Forums, Community Forums, open Survey, SurveyMonkey, etc.