Global supply chains are entering a new phase of adjustment. After several years defined by pandemic disruption, liquidity surges and emergency financing measures, corporate strategies are now being reshaped by higher funding costs, tariff uncertainty and a more fragmented geopolitical landscape.

A recent report from Citi Institute, in collaboration with Citi Services, examines how companies are navigating this environment and how supply chain finance (SCF) structures are adapting. The study is framed explicitly in technological as well as geopolitical terms. As the report states, “Technology - in particular artificial intelligence and blockchain - has also had a profound impact on trade and supply chains.” 

That shift is already visible in corporate behaviour. In the report’s Large Corporate Survey, “36% [of respondents said] they were using AI,” marking a sharp increase from the previous year. AI is no longer a peripheral innovation but part of mainstream trade operations.

Against this backdrop, supply chain finance is being repositioned. Working capital management, counterparty resilience and digital infrastructure are increasingly interlinked. The report’s title and overarching theme, Durable Global Trade in the Age of AI, signals that liquidity, risk and technology are converging. Treasury and finance teams are not simply funding supply chains; they are being drawn into the redesign of how those supply chains operate.

Liquidity pressures and the working capital imperative

Working capital management sits at the centre of the report’s analysis. While trade flows have proven resilient, the environment for earnings and cash flow has become more complex, particularly as tariffs, funding costs and geopolitical fragmentation reshape cost structures and supplier networks.

For the more than one-third of large corporates already using AI in global trade, the focus is not headcount reduction but improving working capital efficiency and reducing trapped liquidity. Among respondents investigating generative AI, 72% said they hoped to realise “significant improvement in working capital efficiencies,” while 71% cited removing “pockets of trapped liquidity” as a key objective. 

This is not a marginal theme. The report frames AI adoption as part of a broader recalibration of supply chain strategy in an era of tariff shifts and tighter conditions. As it notes, “Resiliency continues to be key for many working capital strategies, but as the impacts of tariffs and AI continue to be better understood, opportunity remains present.” 

For treasury teams, the tension remains familiar. Extending payment terms can preserve cash at the buyer level but risks transferring strain to suppliers. Shortening terms strengthens counterparties yet increases immediate funding requirements. Structured SCF programmes continue to serve as a bridge, smoothing liquidity across the ecosystem while allowing buyers to manage their own balance sheets.

AI is increasingly being layered into that equation. The report notes that predictive models can extend into “cash-flow forecasting and default prevention, especially in receivables finance where banks can analyse payables, receivables, ERP feeds, and account statements to anticipate liquidity gaps.” 

For suppliers that have historically struggled to access trade finance, AI also “can shift this cost curve by automating the ingestion and analysis of SME information,” making underwriting more scalable. 

Taken together, the message is less about technological disruption and more about capital discipline. In a higher-cost, more uncertain environment, working capital is being treated as a strategic lever. AI, in this context, is emerging as a tool to enhance visibility, accelerate decision-making and broaden access to financing, not replace the core treasury mandate of balancing liquidity, resilience and cost.

Tariffs, geopolitics and supply chain reconfiguration

Trade policy and geopolitical fragmentation remain central forces shaping supply chain strategy. The report makes clear that global trade is not retreating, but reorganising. It observes that “global trade significantly reorganised due to geopolitics, supply chain diversification, and new production centres, preceding 2025 tariffs.” 

Tariff policy in particular has moved from background noise to boardroom issue. In the Large Corporate Survey, 36% of respondents globally cited reducing tariff exposure as a key motivation when considering a shift in supply chains, with materially higher figures across APAC (44%) and EMEA (48%). 

Managing tariff exposure in anticipation of future changes also ranked prominently in several regions, underscoring how policy volatility is influencing sourcing and investment decisions.

The report frames this adjustment as part of a broader structural shift rather than a temporary response. As it concludes in its economic overview, “The forces reshaping global trade - from geopolitical tensions and tariff volatility to technological competition and evolving energy demand - are driving a more distributed form of globalisation.” 

Importantly, tariffs are not acting in isolation. The report repeatedly links trade fragmentation with technological transformation, noting that “shifts in US tariff policies created new uncertainty for corporates active in global trade while artificial intelligence has quickly redefined business-as-usual supply chain management practices.” 

The twin pressures of policy volatility and digital acceleration are reshaping procurement models, supplier selection and financing structures simultaneously. For treasury teams, this combination demands greater agility. Regional diversification, reshoring considerations and energy constraints all influence working capital requirements and cross-border funding structures. Rather than signalling deglobalisation, the report describes a system becoming more multipolar and adaptive, with Asia, Latin America and ASEAN emerging as increasingly important nodes in diversified supply chains. 

In that environment, supply chain finance frameworks must be capable of scaling across jurisdictions while accommodating shifting regulatory and tariff regimes. Trade policy shifts now feed directly into liquidity planning, pricing strategy and supplier financing decisions. This reinforces the report’s broader message that geopolitics, working capital discipline and technological change are converging.

The evolution of supply chain finance structures

Supply chain finance is evolving in parallel with the broader realignment of global trade. As production networks regionalise and procurement models shift, financing structures are becoming more varied and more deeply embedded within operational workflows.

A central theme of the report is that digitisation is no longer incremental. In the section Reengineering Trade Finance With AI: From Processing to Insight, the report states that AI “is poised to transform trade finance by addressing longstanding operational inefficiencies and risk management challenges.” What was once a largely manual, document-heavy process is increasingly supported by automated extraction, validation and data structuring.

The implications are operational as much as strategic. Describing intelligent document processing, the report notes that AI transforms workflows by creating “a combined capability - extraction, validation, and output generation - rather than just a process of digitisation.” In practical terms, that reduces reconciliation burdens and improves the speed of issuance and funding decisions, particularly in instruments such as letters of credit.

This technological shift also extends into risk management and supplier access. The report highlights that “AI can shift this cost curve by automating the ingestion and analysis of SME information,” making underwriting more scalable and potentially widening access to trade finance. For multi-tier supply chains, that has implications for programme inclusivity and liquidity distribution across the ecosystem.

Beyond operational transformation, AI is also reshaping the underlying demand for trade and working capital solutions. In its discussion of infrastructure investment, the report notes that “the data centre world is undergoing a once-in-a-generation capital expenditure supercycle,” driven by the explosive growth of AI. The scale of that investment is substantial, with global capex related to AI projected to reach $7.75 trillion by 2030.

Such expansion is not confined to technology firms. It cascades across hardware manufacturing, energy supply, construction and logistics, creating multi-layered working capital demands throughout the ecosystem. As equipment procurement intensifies and project timelines compress, trade finance and SCF structures are increasingly used to bridge funding gaps between component suppliers, system integrators and data centre operators.

Alongside AI-driven investment cycles, experimentation with digital assets and tokenisation is gathering pace. In its discussion of tokenised trade instruments, the report describes how “the convergence of regulatory advances and digital asset technology has created a rare window to modernise the trade finance ecosystem at scale.” While legal and interoperability challenges remain, these initiatives point to a future in which settlement, documentation and distribution are increasingly digital and integrated.

This evolution offers efficiency gains but also raises structural questions. As financing becomes more embedded within enterprise systems and data architectures, governance and oversight requirements intensify. Automation can reduce manual intervention, but it does not eliminate the need for control frameworks. If anything, as financing models scale and diversify, transparency and risk management become more critical rather than less.

Taken together, the report presents the next phase of supply chain finance not as a single innovation, but as a convergence: digital infrastructure, AI-driven risk analytics, large-scale investment cycles and alternative structuring tools reshaping how liquidity is deployed across increasingly complex supply networks.

Sustainability and ESG integration in supply chains

As supply chain finance structures evolve, sustainability considerations are increasingly embedded within broader supply chain strategy. The report highlights that resilience and long-term viability are now central themes across trade and procurement decisions, with ESG expectations influencing how supplier relationships are structured and monitored.

Progress, however, remains uneven. While intent may be widespread, translating environmental and social commitments into consistent operational standards across complex, multi-tier supply chains is more demanding. Suppliers continue to face practical constraints, including limited technical expertise, difficulty integrating new frameworks into existing systems and the cost of upgrading data infrastructure. 

Without reliable, standardised data across supplier networks, linking financing terms directly to ESG performance becomes administratively complex and potentially vulnerable to scrutiny.

Digital capability therefore becomes a critical enabler. The report’s broader discussion of AI-driven document extraction, structured data creation and ecosystem interoperability suggests that improved visibility across procurement and trade flows can support more consistent monitoring of supplier performance. The same tools being deployed to strengthen risk assessment and liquidity forecasting may also improve the quality and auditability of sustainability reporting.

For treasury teams, the integration of ESG into supply chain finance adds another design layer rather than replacing traditional objectives. Working capital efficiency, liquidity resilience and counterparty risk management remain central. ESG-linked structures sit alongside these priorities, dependent on data integrity, cross-functional coordination and regulatory clarity.

Rather than presenting sustainability as a standalone trend, the report situates it within a broader recalibration of global trade. In an environment shaped by geopolitical fragmentation, tariff volatility and rapid technological change, sustainability becomes part of the wider shift toward transparency, resilience and adaptability across supply networks.

Technology, data and the future of trade flows

As supply chain finance becomes more embedded within corporate strategy, digital infrastructure is shifting from operational support to structural necessity. The report makes clear that technological change is not confined to front-end digitisation but is altering how trade data is interpreted, validated and deployed.

One of the clearest shifts described is the move beyond traditional optical character recognition. As the report notes, “Even after years of tuning, OCR accuracy is around 65%-70%, hampering straight-through processing, and requiring manual validation.” 

The implication is that incremental automation is no longer sufficient for the scale and complexity of modern trade flows.

AI-driven systems, by contrast, are being designed to interpret unstructured documentation and apply contextual judgement. In trade compliance, for example, the report explains that AI is “particularly well-suited” to synthesising diverse signals to identify anomalies that might otherwise be missed under time pressure and high volumes. This moves risk management from static checklist screening towards dynamic pattern recognition.

The report also highlights the strategic value of structured data creation. Once trade documentation is reliably converted into reusable datasets, institutions can track behavioural consistency over time, detect deviations earlier and support more informed credit decisions. This capability extends beyond operational efficiency; it strengthens underwriting, monitoring and capital allocation across supply chain finance programmes.

Interoperability remains a parallel challenge. Traditional system integration relies on rigid mapping and repeated coordination whenever formats shift. The report describes this process as “slow, costly, and vulnerable to errors or miscommunication.” 

More flexible, AI-enabled approaches allow data to be interpreted in context rather than confined to static templates, reducing reconciliation friction across counterparties and platforms. For banks and transaction service providers, this evolution expands the scope of their role. As trade finance becomes increasingly data-intensive, liquidity provision sits alongside digital enablement, compliance analytics and infrastructure integration. The transformation is as much architectural as it is financial.

For treasury teams, the implication is straightforward: effective supply chain finance now depends not only on funding capacity but on the quality, consistency and governance of data. As the report observes, the transformation underway in trade finance is reshaping how institutions process information, assess risk and deploy capital, with speed and control becoming central design priorities.

Risk concentration and systemic considerations

Systemic risk is a recurring theme in the report, particularly in the context of supply chain concentration. The research makes clear that the global trading system is not retreating, but reorganising, and that reorganisation is partly a response to accumulated vulnerabilities. In its economic overview, the report concludes that “The evidence across trade flows, export patterns, investment trends, and corporate behaviour shows a global system undergoing structural realignment.” This realignment reflects not only tariff volatility and geopolitical tension, but also the lessons learned from recent supply disruptions.

Concentration risk remains central to that recalibration. Heavy reliance on specific geographies, counterparties or production hubs can amplify shocks when they occur. The report notes that supply chains have demonstrated resilience, “responding quickly to policy shocks while continuing to reconfigure around new production centres, regulatory incentives, and risk considerations.” The emphasis on reconfiguration underscores that resilience is being engineered, not assumed.

For corporates, this translates into a more deliberate approach to scenario planning. Supplier diversification, reshoring considerations and energy security are increasingly evaluated alongside cost efficiency. Survey findings show that managing supplier risk and improving proximity to end consumers are among the leading motivations when shifting supply chains. Risk management and cost management now sit side by side rather than in tension.

Concentration risk is not only operational, it is financial. Funding structures must account for the possibility of delayed shipments, supplier insolvency or sudden regulatory change. Diversifying supply bases and financing channels can increase near-term expense, but it reduces exposure to correlated shocks that are more difficult to hedge.

Boards, meanwhile, are increasingly treating supply chain resilience as a governance issue rather than a procurement detail. The report’s broader framing of globalisation as becoming more multipolar and adaptive suggests that volatility is no longer episodic but embedded. In that context, systemic risk management becomes an ongoing design principle rather than a reactive response.

Implications for treasury and finance leaders

Citi's research points to supply chain finance becoming less of a discrete programme and more of an organising logic for how corporates manage liquidity, supplier resilience and execution risk. The through-line is durability under pressure: not an absence of disruption, but an ability to absorb shocks, re-route flows and keep funding moving as incentives, tariffs and operating assumptions shift. That matters because the report frames the current landscape as structurally different from the pre-pandemic playbook. In the report’s foreword, Adoniro Cestari, Global Head of Trade and Working Capital Solutions, Citi Services, argues: “Disruption is no longer a bug in global trade - it’s a feature.” 

Treasury’s role, in that context, is to make volatility financeable: building working capital structures that can flex when order patterns lurch, when suppliers relocate or when policy changes land faster than contractual terms can keep up.

The report’s message is also that resilience is not cost-free, but it is becoming strategically non-negotiable. Diversification and redundancy may have started as contingency planning. Now they shape cash deployment decisions, counterparty strategy and the design of supplier finance frameworks.

AI sharpens that shift again, not as a bolt-on, but as an accelerant. The report explicitly positions technology alongside geopolitics as a driver of how trade operates and how it is funded, noting that “AI and other advanced technologies are also changing how trade is financed.” The practical implication is that data quality, governance and interoperability sit closer to the centre of liquidity strategy than they did even a few years ago.

The report ultimately avoids both complacency and alarm. It acknowledges how messy the operating environment remains, but states “global trade is not in retreat - it is evolving, supported by innovation, investment and operational agility.” 

The challenge is not choosing between efficiency and resilience but designing systems that can deliver both. Diversifying suppliers, embedding AI-enabled risk monitoring, integrating ESG metrics and scaling financing across jurisdictions are no longer discrete initiatives. They form part of a single, evolving architecture of capital discipline. Supply chains are not stabilising, they are recalibrating. The task now is to ensure that liquidity structures, risk controls and digital capabilities recalibrate in step.