As head of BNP Paribas' Trade Filiere Competence Center, Marguerite Burghardt has seen how trade finance is being shaped by both technological and economic developments. The following four forces are rapidly changing the landscape and present both opportunities as well as complexities:
Head of BNP Paribas Trade Filiere Competence Center, Marguerite Burghardt, on the four new paradigms shaping the world of trade finance.
1. Banks have to tackle a paradox
Banks are both service providers and data companies, where customer experience is key. The challenge banks face is creating intimacy with their clients, whilst balancing the need to be aggregators of services that go beyond just traditional banking products.
2. Transaction Banking ecosystem is a moving target
A structural shift in traditional positioning of players. Clients and fintechs could enter the market, and also present an opportunity for collaboration and co-creation with banks. A prime example is the growing cooperation among banks in trade finance with inter-bank projects currently in the market.
3. Technology is an enabler
Technology is a means to go from point A to point B. Remaining focussed on the destination of travel and improving the customer journey is crucial, and having a modular approach that is also application programming interface (API) driven will become the new competitive advantage.
4. Sustainable trade finance growth
The opportunity for green value chain financing is significant. In particular greening the supply chain and utilising distributed ledger technology (DLT) will help corporates to embed sustainability within their trade financing activities.