Is Trade Digitization the answer to Commodity Trade Finance fraud?

Congratulations to our Triterras’ Chief Commercial Officer (CCO) Ashish Srivastava, who was interviewed and quoted in the article “The Transaction Banking Revolution has Only Just Begun” by Euromoney. Ashish was featured along with C-Suite Executives from Citi, HSBC, Deutsche Bank and Standard Chartered Bank, among others.

The COVID-19 pandemic caused significant disruptions to trade finance, challenging its traditional processes and resilience. Despite the initial setbacks, the industry demonstrated remarkable adaptability by embracing digital solutions and collaborating with governments and institutions.

Ashish Srivastava, our Triterras' CCO and Rudy Shoushany, Founder of DxTalks, discuss how Triterras is solving the problems for the world's Micro, Small & Medium Enterprises (MSMEs), and the way Blockchain is playing a role in Trade Finance by helping to reduce risk associated with global trade in reconciling the divergent needs of exporters and importers.

Trade Finance has archaically been dependent on manual, paper-intensive processes, rendering it laborious and susceptible to errors, precipitated numerous challenges, encompassing a lack of transparency, processing delays, and restricted accessibility. FinTech is assuming a crucial role in modernizing Trade Finance by ushering in groundbreaking solutions that streamline processes, mitigate risks, and augment efficiency.

NBFIs, such as fintech companies, credit unions, and insurance firms, are challenging traditional banks by offering innovative financial services that are often more efficient, cost-effective, and customer-centric. They are leveraging technology to provide services like peer-to-peer lending, mobile payments, and robo-advising, which were once the exclusive domain of traditional banks.

Trade finance, the financial instruments and products that enable international trade, are significantly influenced by interest rate expectations. As global trade powerhouses, the US and Europe's interest rate changes can ripple across worldwide trade finance flows.

Do trade providers expect growth or slowdown in global trade? Predictions that global trade will stagnate for the remainder of this year due to factors such as financial vulnerabilities and inflation. Ashish Srivastava, our Triterras' CCO tells Euromoney, "Global increase in trade finance lending interest rates in MSME segment has curtailed demand as certain marginally profitable business models do not support borrowing at higher rates”.

Trade finance is always a topic where the gap continues to widen and as much as companies are doing their best to close the gaps, there continues to always be the next hurdle. In this Treasury Today Group article, Mr. Srinivas Koneru, our Triterras' Chairman & CEO, refers to the trade finance market as cyclical, but adds that stricter capital requirements have reduced the amount of funding banks can make available for trade finance over the last 5 years.

The resurgence of LCs is a testament to the resilience and adaptability of the global trade finance industry. It demonstrates the industry's ability to respond to changing circumstances, whether it is the rise of digital technology or the tightening of liquidity, it also underscores the enduring relevance of traditional financial instruments.

When it comes to trade finance, it seems that the system is stuck in a time machine in the past. The traditional, and now seemly old-fashioned trail of paper trade documents are proving that the numbers frequently do not add up. Paul Golden at Euromoney spoke to Ram Arapally of Triterras in this great piece to help provide solutions to combat fraud and discuss the future of digitalization in trade finance. Digitalizing the system may just be the best way to match up those numbers.

Did you know that Supply Chain Finance is one of the fastest growing markets? But despite its rapid volume increase over the past few years, there is still a financing gap of $1.7 trillion as of 2020. Triterras' Chief Commercial Officer Ashish Srivastava explains the gap, how it impacts businesses and how digital supply chain is the future for economic recovery.

Will the banking sector notice an increase in the cost of trade finance instruments? Mr. Srinivas Koneru, our Triterras' Chairman & CEO sheds light on this with an explanation on how banks will be selective with funding, and ultimately impacting small to medium businesses. The EU Capital Requirements Regulation (CRR) seems to have notable impacts on EU banks.