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SCF: UK exporters support; Tradeshift teams with banks; ICC - Rethinking Trade report

Fintech companies, banks and governments are all trying to improve the finance for suppliers in/get a part of the action in the supply chain finance business. Latest developments include:

Exporters receive support from UKEF, high street banks partnership:

  • United Kingdom’s state-run export credit agency, UK Export Finance (UKEF) has announced that it will partner with five of the UK’s biggest banks to deliver government-backed financial support to exporters more quickly and efficiently.
  • Partnering with Barclays, HSBC, Lloyds Banking Group, RBS/NatWest and Santander, UKEF will soon be able to extend its support to supply chain companies of UK exporters, significantly increasing the number of businesses able to access UKEF-backed trade finance.
  • As a result, smaller companies that support big UK exporters will be able to secure government-backed financing to deliver products and services and benefit from their clients’ international business.

Tradeshift, the business networking firm and cloud supply chain platform, teams up with banks:

  • Santander on 14 July announced a joint offering with business networking firm Tradeshift to increase capital provided to its clients’ supply chains. Connecting more than 1.5 million companies across 190 countries
  • HSBC revealed a similar deal earlier this year.

International Chamber of Commerce (ICC) Banking Commission has released its 2017 report entitled Rethinking Trade and Finance. Based on the Global Survey on Trade Finance – with 255 responses from banks located in 98 countries, as well as insight and commentary from expert contributors. Key findings were:

  • Some 61% of banks report more demand than supply for trade finance in the global market. ICC Banking Commission and the Asian Development Bank estimate the level of unmet demand for trade finance stands at over US$1.6 trillion a year
  • Only a minority (21%) see traditional trade finance showing growth in the future
  • Boston Consulting Group’s trade finance model (included in the report) predicting revenue growth of around 4.7% a year
  • Over 68% of respondents point to compliance and regulatory requirements as having the highest adverse impact on trade finance in the short-term
  • Some 50% expect most of trade flow processes to be digitised by 2027 – while an almost equal portion expect the evolution to take from 10-25 years
  • Some 46% identify multinational and large corporates as the highest priority client segment for their trade finance business, with a quarter favouring middle market clients and less than 20% identifying Micro, Small and Medium Enterprises 
  • Some 57% of respondents believe traditional trade finance will exhibit little or no growth – while 22% think it will decline outright year-on-year
  • Cost control pressures are considered the biggest challenge facing trade finance units.

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