An ITFA working group has recently developed a template for financial institutions (FIs) granting short-term trade loans via the SWIFT MT799 format. 

The SWIFT MT799 is commonly used by banks to communicate non-binding information on trade finance transactions. While widely used, this system has historically lacked the uniformity to operate across multiple jurisdictions. This has led to difficulty for banks seeking to obtain foreign currency financing, contributing to the barriers to finance which many emerging markets face.

The new template aims to enhance this accessibility for both borrowing and lending banks. It offers clear guidance on topics from floating rate loans with periodic interest resets to different governing laws, and is designed to be concisely focused on practicality. 

Paul Coles, chair of ITFA’s Market Practice Committee, led the working group, which included experts from Sullivan and FCMB Bank (UK).

Geoffrey Wynne, a partner at Sullivan and part of the ITFA working group which developed the template, said, “This template is important because, by provides a starting point for banks to document short term trade loans using SWIFT, it should reduce the time needed to negotiate and finalise the relevant trade loan agreement. 

“While it provides a starting point, the template also allows for the customisation of the documentation to meet the specific needs of individual transactions. We hope this will be key to its success.”

ITFA has emphasised that this template exists to complement other comprehensive frameworks, but focuses on standalone, one-off loans that are solely documented through SWIFT messaging.

The standardisation of this format is intended to provide a benchmark of “what good looks like”. 

The template and accompanying guidance notes are now available to ITFA members through the association’s website, though users are advised to seek legal advice before implementation.

The post New trade loan template to standardise and guide trade finance transactions launched by ITFA appeared first on Trade Finance Global.

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At the inaugural Trade Finance Conference of Parties (TF COP) in Washington, DC, ITFA unveiled the Washington Declaration, a proposal calling on the United Nations (UN) to recognise the trade finance gap as a critical barrier to sustainable development.

The Asian Development Bank (ADB) estimates the global trade finance shortfall at $2.5 trillion – a chasm that effectively excludes millions of small businesses from international trade networks. 

Sean Edwards, ITFA’s Chair, framed the issue beyond mere financial mechanics. “It’s about supply chain resilience, optimising resources, and creating social value, especially in less developed markets,” he explained. 

The declaration sets an ambitious target: halving the global trade finance gap by 2030 and eliminating it completely by 2040. Collaboration between public and private sector stakeholders is essential to this end.

Nathalie Louat from the International Finance Corporation highlighted that “nearly half of trade finance requests from SMEs are rejected.” 

“Trade finance can have a more profound impact on small businesses compared to traditional financing, yet the system continues to fail those who need support most,” she said.

The summit brought together over 80 participants from across the trade finance ecosystem, including development finance institutions, commercial banks, insurers, and technology firms. A key innovative proposal is the potential creation of trade finance gap bonds, similar to existing green and social bond frameworks.

The Washington Declaration explicitly links the trade finance gap to the UN Sustainable Development Goals, arguing that addressing this shortfall could significantly accelerate progress on poverty reduction, employment, and economic growth.

The post Trade finance leaders seek UN support to close global economic divide appeared first on Trade Finance Global.

Trade Finance Global (TFG) is excited to launch its latest whitepaper, ‘Are we doing enough to bridge the trade finance gap?’

The publication is based on a roundtable discussion hosted by TFG during the International Trade and Forfaiting Association’s (ITFA) 50th Annual Conference in Limassol, Cyprus.

The ‘$2.5 trillion global trade finance gap’, which represents an unmet financing need, is a statistic that plays like a broken record in our industry. The figure’s accompanying echo highlights that small- and medium-sized enterprises are particularly underserved. 

But amidst the noise, there are few tangible strategies for reducing the $2.5 trillion gap. That’s why TFG’s Editorial Director Deepesh Patel met with eight industry leaders in sunny Cyprus, to discuss what solutions can be implemented to democratise trade finance access.

The roundtable featured:

• Cruz González Agrelo, Head of Lenders Solutions Team Europe & Global Head of Receivables and Supply Chain, WTW
• Baihas Baghdadi, CEO & Founder, TRADE & WORKING CAPITAL
• George Bellord, Director, BPL
• Sean Edwards, Chairman, International Trade Forfaiting Association (ITFA)
• Harsha Mehta, EMEA/LatAm Trade Asset Distribution, Citi
• N L N Swaroop, Global Product Head – Sustainability, Innovation, FIs & Asset distribution – Global Trade and Receivables Finance, HSBC
• Khilola Turaeva, Head of Trade Risk Distribution, EMEA, Bank of America
• Patrik Zekkar, CEO, Enigio

The whitepaper capitalised on the participants’ expertise, to delve deep into credit insurance for SMEs, and the rise of private credit and portfolio-based solutions for SMEs. Tailored products were also explored. 

Regarding risk distribution, the whitepaper provides a detailed explanation of the originate-to-distribute (OTD) model, which offers banks a means to shift risk from balance sheets to institutional investors, and has recently gained traction.

No contemporary study would be complete without considering digitisation. The whitepaper looks at how technology is being implemented across trade finance segments, the impact of regulation in this regard, and how solutions can help companies to scale.

Deepesh Patel, Editorial Director at TFG, said, “While I often feel powerless in the face of challenges threatening the global economy, I am convinced that the trade finance gap is a solvable issue through coordinated cross-sectoral efforts. This expert panel reinforced my belief that the $2.5 trillion gap is not an inevitability we must simply accept.

“We hope this whitepaper instils some optimism about the future of trade finance for SMEs.”

The post Whitepaper launch: Are we doing enough to bridge the trade finance gap? appeared first on Trade Finance Global.

Preparing for the future is critical in the rapidly changing insurance and reinsurance industry.

That’s why the industry needs to prioritise allocating its limited resources to ensure that there is a pool of talent in place to contribute – otherwise, the industry’s very future will be jeopardised. The need for a concerted approach to talent recruitment, mentoring, and development in the insurance and reinsurance industries must be met.

To discuss this further, Deepesh Patel, Editorial Director at Trade Finance Global (TFG), sat down with Marilyn Blattner-Hoyle, Global Head of Trade Finance, Trade Credit & Working Capital Solutions at Swiss Re Corporate Solutions, at the 50th annual conference of the International Trade and Forfaiting Association (ITFA) held in Limassol, Cyprus.

Adapting recruiting practices to attract top talent into trade finance

The industry is always on the lookout to attract and develop top talent. Empowering teams to achieve the organisation’s purpose often inspires top talent. At Swiss Re, for instance, we find our teams connect in particular with the purpose of contributing to global resilience. For our trade finance team, that means partnering specifically on the risks that support global trade. This can mean better access to trade financing, across emerging and developed markets. Connecting this purpose to the topic of empowerment is where we see our teams thrive. The intention is to build and maintain a fail-safe environment that enables team members to develop in their various roles and across their career paths. 

Blattner-Hoyle said, “We see the dividends of investing in our team’s development and empowerment. This can be evidenced in how well the team develops solutions with clients and brokers who sit at our core. With these client and broker partners, we also ensure that trade finance gets to the market segments, purposes like ESG, and/or countries that need it while, of course, growing a profitable business.”

Despite a number of highly skilled and visible leaders, the trade finance industry is preparing for an upcoming retirement gap. This makes it crucial for organisations to ensure capability and experience amongst incoming talent, also reflecting the client base and changing world we work in.  

We are focusing on transferring existing skillsets as well as building capabilities needed for the future such as in respect of topics like data-driven underwriting, AI, and evolving product structures.  Unbiased systems can be used to achieve this, helping companies figure out optimal approaches to development, promotions, and recruitment as well as creating an environment that creates a complementary team. Recruitment and staff development objectives can be reflected in modes of questioning and interview style to ensure that personal biases do not affect the talent screening and selection process.

Blattner-Hoyle said “I’m proud of the diversity of the trade finance team at Swiss Re which we built by promoting from within and also hiring complementary skillsets and backgrounds. Team make-up is a big factor in the successful build-out of the business, how we serve our clients and brokers, now and as the landscape evolves”

Mentoring and developing talent

Mentorship and sponsorship are critical in this regard. Blattner-Hoyle said, “At any moment, I try to mentor, say, maybe five people in the industry. Often the first thing I ask them is, what inspires you to be in this industry? What do you want to do? I try empower around that.

“Often, that’s where purpose comes in. These coaching conversations also inspire me on how we can shift our “traditional” ways to retain and attract such talent.”

Companies should emphasise building resilience among team members in the mentoring and development process. Setbacks in the workplace are inevitable, so it’s useful to help the team prepare to handle failure at work and feedback that may sometimes come from clients, peers, managers etc. In this vein, ensuring team members have a manageable work-life balance contributes significantly to wellbeing and mental health. AI may help with this topic too.      

Building resilience in people and fail-safe environments

The first step is listening and understanding our team members. Additionally, we find that making them feel almost akin to a business owner creates a good base for this environment. This would usually propel them to approach their tasks without the fear of failure, knowing that they are valued and trusted. 

Team members need to know early in their careers that they do not need to have answers to every challenge they are confronted with at work, but would rather be valued for their contributions to thought processes, proposing constructive ideas or technological inputs around enhancing existing products or creating new ones. Often a first failure leads to the best outcome in the next move. 

Blattner-Hoyle said, “It’s about making people feel welcome to speak up, to give their ideas, right from the beginning. It’s also building a feedback culture and making it okay to give and receive feedback all the time.” Regular one-to-one monthly sessions, for instance, are a means to establishing this.     

The potential of AI in credit insurance

Experimenting with AI could enhance productivity in this field. Within the Swiss Re trade finance team, for instance, solutions like Microsoft Copilot, an AI chatbot, have been deployed. Microsoft Copilot helps record minutes of meetings and produces quality transcripts. It can also respond to queries based on meetings recorded by it, saving team-hours.

Blattner-Hoyle said, “We are also looking into how can we augment credit analysis using AI, which is important to us. As you know, a big piece of our business is evaluating credit risk”. 

There is a lot of expectation about the benefits that can be derived from using AI in the credit processing space. These are early days, however; early adopters of this technology are learning how best to harness it to their advantage.     

There is a place for the union between the benefits offered by AI and the unique contributions that people bring to the table. AI can, for example, be configured to produce speech, but our experiences so far show that it may lack the “human touch.” 

Despite the huge productivity gains AI can offer, the contributions of a human brain will never lose value. Training teams and minds around the benefits of AI and the biases that it brings is key to maximising its benefits. 

Swiss Re has trialled AI for a variety of tasks to learn as much as possible about the biases that could come with its use. For example, they use an AI-driven solution to turn thousands of news articles into targeted and actionable early warning signals across our portfolio via updated credit scores. This type of news data allows the underwriters to compare what AI produces compared to what they would have found using their usual tools. The intention is to ensure that observed biases are known and eliminated where possible or factored into a task when combined with human input to avoid being taken down the wrong path. This is journey. 

Why consider entering the trade finance industry?

Trade finance is tangible because trade finance solutions help real people, real companies, real services, and real economies. By providing solutions that facilitate the completion of trade finance transactions, organisations not only contribute to making the world more resilient but also create jobs and reduce poverty. 

Blattner-Hoyle summarised, “This amazing purpose drives the passion with which Swiss Re’s closely knitted group provides deals and solutions to its clients and brokers every day, and we have so much fun doing it. Great deals and great purpose – everyone should come to trade finance.”

The post VIDEO | A delicate balance between human oversight and automation appeared first on Trade Finance Global.

The transactions involved a sugar shipment from the Americas to the UK, utilising a digital bill of exchange (dBE) created on Enigio’s trace:original platform. Mercore initiated the process by creating the dBE for their exporting client. The instrument was then transferred digitally to Lloyds, who arranged for their importing client to accept it electronically.

This collaboration represents the first instance of a DNI being transferred between two separate financial institutions under the ITFA initiative. Previous digital transactions typically involved only one financial institution managing both the importing and exporting parties.

Surath Sengupta, Managing Director of Trade Innovation and Transformation at Lloyds, said, “Digital trade solutions make it simpler, faster and more efficient for our clients to do business.” These efficiency gains motivate the digitisation of trade documents to a great extent.

The ITFA’s DNI Initiative aims to fully digitise Bills of Exchange and promissory notes in cross-border trade. This latest development builds on previous milestones, including Lloyds’s completion of the UK’s first digital promissory note purchase in August 2022.

André Casterman, ITFA Board Member, noted that the transaction “demonstrates the scalability of digital negotiable instruments when implemented in a collaborative way using interoperable technologies”.

Industry observers suggest that such digital innovations could significantly reduce processing times and costs associated with traditional paper-based trade finance, potentially increasing access to trade finance for businesses worldwide. Collaboration between banks and fintechs can drive financial inclusion globally.

The post Lloyds and Mercore complete transactions with dBE appeared first on Trade Finance Global.

As part of the 50th Annual International Trade And Forfaiting Conference (ITFA) in Cyprus, Trade Finance Global (TFG)’s Editorial Director Deepesh Patel sat down with Carol Searle, General Counsel and Group Board Director at Texel Group, to discuss her outlook for the credit insurance market at large.

Global trade expansion and digital innovations in trade finance have spurred the industry towards rapid growth. The industry is expected to deliver a compound annual growth rate (CAGR) of around 11% over the next decade, projected to double in value by 2032. 

Searle has watched the market weather rapid shifts and abrupt crises, crediting a dynamic, diverse culture of innovators with the market’s year-on-year success. 

Alongside her close working relationship with the team at ITFA and with a background in shipping trade law, Searle has seen the trade finance world through multiple crises—including the Argentine economic crises, the Global Financial Crisis, the COVID-19 standstill in global trade, and the ongoing supply chain volatility. 

“One of the things that I love about [credit insurance] is that it’s a market that’s very nimble and very quick to move and very flexible, and that adapts to the changing environment.“

But a strong, adaptable outlook is not without its challenges, and many are wary that a tightening regulatory framework may threaten the market’s dynamism.

The rear view: Basel II

In 2004, the Basel Committee on Banking Supervision (BCBS) implemented Basel II, an amendment to the Basel regulatory framework that allowed financial institutions to establish tailored capital regimes for different levels of risk. 

“Basel II introduced something very, very significant for the insurance market. It introduced the ability for a bank to use unfunded credit protection [such as insurance] to substitute the risk weight  of a borrower with that of the provider [insurer] and thereby get some form of regulatory capital relief… that has been a huge area of development for our insurance market.”

Since the introduction of Basel II in 2004, the trade credit insurance market has grown significantly and is now worth more than $12.8 billion.

“There was a great use of banks in mitigating the credit risk by using insurance. And where this market really grew quite exponentially was as a result of the implementation [of Basel II in Europe in 2006],” says Searle.

Basel II allowed banks to calculate credit risk by using internal models alongside the standardised approach. This permitted a more sophisticated approach to assess diverse types of risk and introduced a risk sensitivity in capital requirements for banks, allowing flexibility that did wonders for the sector’s use of capital. 

Future risks in credit insurance – Basel IV

Then came Basel III (2010), and the finalisation of Basel III in 2017: known as  Basel 3.1 but also often referred to as Basel IV (critics argued that the changes were so significant that it should be treated as a distinct round of reforms). The Basel IV  – reforms to the regulatory framework had two main components:

1. An increase in capital requirements, requiring banks to maintain additional buffers, and
2. Limits on the calculation of risk-weighted assets (RWAs).

Basel IV aims to reduce the variability in the risk sensitivity of capital requirements by constraining the use of internal models to increase the level of harmonising the way banks assess credit risk.  One way this is achieved is by restricting the ability of advanced banks to model the Loss Given Default (LGD) on exposures to large corporates and financial institutions impacting the calculation of RWAs. LGDs are now pre-set to 40% for large corporates and 45% for financial institutions. For these purposes insurance companies are considered to be financial institutions.

The impact on bank’s buying of credit insurance for RWA management will depend on the regulatory impact on the underlying exposure and the regulatory treatment of insurance. Searle is concerned that the differential of RWA on exposure to a high rated borrower and an insurer may make insurance of better rated risks less appealing to a bank. 

Some key stakeholders (ICISA, IACPM), including those associated with the ITFA, have provided significant feedback to lawmakers in Europe and the UK on the long-term ramifications of the reforms.

“One of the concerns that we felt at the working group in ITFA some time ago was that it would no longer be economically viable for a bank to insure the better-rated risks. As a result of this, insurers will see a less diverse portfolio of risks. More likely, they will only be shown the low-rated risks,” says Searle. 

“This reduction in the diversification of the asset classes and risks being taken to the insurance market could lead to a contraction of the market, maybe people exiting from it.”

The International Association of Credit Portfolio Managers (IACPM) has highlighted that Basel IV’s standardisation of RWAs through preset LGD values could limit the ability of financial institutions to assess risk. Changes to the framework have and will impact how such institutions manage credit risk, making it more challenging for banks to optimise their capital. This could reduce their ability to lend or require them to hold more capital against the same level of risk – a blow to smaller, newer and more innovative lenders.

For context – the implementation of Basel IV is projected to leave a €52 billion hole in available capital in the European system alone.

The outlook

Basel IV’s primary aim is to strengthen the regulation, supervision, and risk management of banks. Ongoing refinement through open dialogue with the BCBS can allow the credit insurance market to strengthen confidence in their products. While Searle and her colleagues remain vigilant of these regulatory changes, there are pragmatic long-term possibilities. For example:

• Sustainable finance: Basel IV encourages institutions to better integrate environmental, social, and governance (ESG) factors and climate risk modelling. 
• Digital innovation: Tightening regulatory requirements are widely expected to reduce available capital. For some, this will drive innovation and perhaps push greater adoption of digital solutions (e.g., automation) to reduce costs.

Searle has long admired the adaptability of the credit insurance market and accepts that Basel II contributed to this success. Basel II was not without similar criticism to the newer iterations, which hold their own promise alongside limitations. 

The people and knowledge behind every outlook, valuation, and trade remain integral to the sector’s growth. 

The post VIDEO | What does Basel IV look like for the trade credit insurance market? appeared first on Trade Finance Global.

The need for clear objectives and decisive leadership becomes increasingly apparent as the trade finance ecosystem evolves. 

To learn more about ITFA’s role in this evolving environment, Trade Finance Global (TFG) spoke with the association’s newest board members: Sian Aspinall, Group CEO at BPL and Chair of the Insurance Committee and Board Member at ITFA, and N L N Swaroop, Global Product Head for Sustainable Trade Finance, Innovation, Financial Institutions, Capital Management and Asset Distribution at HSBC and Board Member for ITFA Trade Finance Investment Ecosystem (ITFIE).

ITFA board member roles and objectives

The new ITFA board members have set ambitious objectives shaped by a vision to enhance trade finance in their professional capacities and their new roles within the organisation. 

These objectives focus on three primary areas: increasing trade finance as an investable asset class, expanding the reach and influence of ITFA across new regions, and promoting sustainability in trade finance practices. 

Swaroop said, “The principal area I’m focusing on is developing trade as an asset class. We are trying to focus on developing the Trade Investment Finance Ecosystem, which includes all actors and brings them together to develop this asset class.”

The aim of developing trade finance as an asset class, which the industry has been discussing for several years, is to expand the availability of capital by attracting institutional investors, asset managers, and pension funds to this space. This will require frameworks that enable non-traditional trade financiers to better understand the asset class and its potential. 

In addition to this scope, there is a focus on expanding ITFA’s global presence. 

Swaroop said, “We want to make ITFA even more international, with new chapters, new strategies, and emerging topics.”

By establishing a stronger presence in emerging markets and fostering regional committees, ITFA can introduce new voices and increase its international footprint, ensuring its broad and impactful influence. Such an expansion will enable the organisation to address localised challenges and promote the adoption of best practices worldwide.

The new board members also hope to bring a revitalised look at sustainability in the industry.

Swaroop said, “Sustainability in trade is still in its infancy. To advance the agenda on sustainable trade finance is absolutely critical to meet the future needs of the industry.”

By focusing on sustainability and creating the needed frameworks, ITFA can help encourage the growth of sustainable trade finance practices, positioning the industry to contribute meaningfully to the broader global sustainability agenda. 

Aligning with environmental, social, and governance (ESG) priorities will attract investors seeking to balance profitability with responsible investment practices, with positive externalities on the planet.

Challenges and opportunities in trade finance

The trade finance industry faces various challenges, but these challenges also present opportunities for growth and innovation. 

One of the most significant challenges is engaging institutional investors and other non-traditional financiers interested in trade finance but have yet to be directly involved. These stakeholders need to better understand the risks and benefits of trade finance as an asset class. 

Aspinall said, “You don’t grow capacity unless you can create diversification, so people can have diversified portfolios.”

Developing the ecosystem requires demystifying trade finance for these investors, allowing them to participate more actively in funding global trade. By presenting trade finance as a stable and attractive investment opportunity, ITFA can bridge the gap between traditional trade finance providers and new market participants.

Standardisation is another key issue within the industry. The lack of consistent language, legal frameworks, and processes can make trade finance opaque and difficult for non-experts to navigate. 

Swaroop said, “We need to bring a framework that allows for the same language to be spoken on both sides.”

Finally, using technology to reduce the costs associated with trade finance represents a significant opportunity. Digitalisation, though not without its challenges, has the potential to streamline processes, enhance security, and improve the overall efficiency of trade finance operations. 

Aspinall said, “Artificial intelligence (AI) has been a common theme, but what does that mean for jobs, and how can we create fulfilling careers in the future? The trade finance industry needs to move forward, not only for its own efficiency, but so that we can attract the talent that will bring the new ideas and take the industry forward.”

By adopting technological solutions, the industry can address long-standing inefficiencies that have hindered growth and development. 

Collaboration between banks and insurance

One of the most promising areas for growth within trade finance lies in the increased collaboration between banks and insurance providers. 

Historically, these two sectors have worked together in trade finance, but there still needs to be more potential for further partnership. By fostering innovation and reducing inefficiencies, banks and insurance providers could together unlock new capacity, drive diversification, and attract new sources of capital to the trade finance ecosystem.

Aspinall said, “It’s about aligning needs and understanding the pain points to build something impactful. Having everyone involved at an initial stage creates more powerful solutions, rather than being brought in too late.”

Unfortunately, insurance capacity has been underutilised within trade finance, largely due to inefficiencies and a lack of understanding between the two sectors. By developing more innovative structures and creating diversified portfolios, insurers and banks can work together to address this underutilisation and increase the capacity for trade finance transactions.

One key opportunity for growth lies in the ability to create new asset classes through innovative structures. For example, by developing excess layers with first-loss positions or insuring whole portfolios, insurers can provide the diversification necessary to attract greater investment. This not only expands the capacity of the insurance market but also creates opportunities for banks to de-risk their portfolios and take on additional trade finance transactions.

ITFA’s newest board members are well-positioned to lead the industry forward by focusing on critical areas such as developing trade finance as an asset class, promoting collaboration between banks and insurers, and addressing the inefficiencies that have long plagued the ecosystem. 

Through cooperation and innovation, ITFA will continue to address the industry’s challenges and unlock new growth opportunities that will benefit all global trade finance participants.

The post PODCAST | ITFA’s new board members push for diversification and capacity growth in trade finance appeared first on Trade Finance Global.

In a quickfire session at the 50th Annual Trade and Forfaiting Conference held at ITFA Cyprus, TFG’s Deepesh Patel spoke with Sean Edwards, Chairman of the International Trade and Forfaiting Association (ITFA), about some of the key themes emerging throughout the conference.

1. Demystifying trade finance as an asset class 

One of the central topics was the effort to further establish trade finance as an attractive and accessible asset class, particularly for non-traditional investors. 

Edwards noted that while trade finance can offer an uncorrelated source of returns, educating investors on the nuances of products like supply chain finance and letters of credit remains a challenge.

To address this, ITFA has recently published a trio of guides—one on securitisation, one on upcoming documentation called “Rules of the Game,” and one on what investors are looking for.

These aim to provide clarity on the documentation, structures, and investor perspectives in the trade finance space. Edwards emphasised the importance of these educational initiatives to broaden participation and liquidity in the sector.

2. Sustainability: Navigating the regulatory landscape 

Sustainability has been a key priority for ITFA, with the association focused on assisting its member banks in navigating the evolving regulatory environment around ESG reporting. But the fundamental question is, what’s changed?

“In a way,” said Edwards in response, “nothing has changed and everything has changed. There is a lot more legislation, and regulation, and we’re trying to help our members get to grips with that.”

Edwards acknowledged the lack of homogeneity in sustainability metrics, which has created uncertainty for both banks and regulators. “There’s so much regulation around, that sometimes even the regulators don’t know what they want the banks to report on.”

To address this, ITFA has convened a working group of a dozen banks to develop common reporting standards, providing a collaborative platform for the industry to align on best practices. This initiative, led by ITFA’s Audit Council, seeks to bridge the gap between regulatory expectations and the practical implementation of sustainability measures.

3. Digitalisation: Building the “digital archipelago”

Discussing the progress in digitalisation, Edwards described the industry’s transition as a shift from “digital islands” to a more interconnected “digital archipelago”. While there has been steady progress in the adoption of digital trade instruments and platforms, the challenge remains in seamlessly integrating these disparate systems into a cohesive ecosystem.

Edwards noted that the legal framework supporting digital trade has improved, but conservative mindsets and the need to update legacy systems continue to slow the pace of transformation.

However, he remains optimistic, stating that the “road ahead” is clear, even if the industry is still “on a bicycle rather than a Ferrari”.

4. Advocacy for trade credit insurance 

ITFA has been actively advocating for the recognition of trade credit insurance in the regulatory landscape, particularly around the upcoming Basel IV framework. 

Edwards said, “If banks can get the capital relief as well as the credit relief, then that obviously makes the product a lot more useful.” He emphasised the importance of both types of relief being provided by trade credit insurance and being accounted for in the new regulations.

Additionally, ITFA has observed a growing interest in portfolio-level insurance solutions, which leverage technology to manage larger pools of receivables rather than relying solely on single-name risk coverage.

5. Originate-to-distribute: expanding the investor base 

ITFA has been key in focusing on the need to distribute trade finance assets beyond the traditional bank-to-bank model. Edwards highlighted the importance of engaging with non-bank investors, such as insurance companies, funds, and sovereign wealth funds, to diversify the source of liquidity in the market.

“Changes are making things more expensive,” he explained. “So it’s much more important to distribute risk. But obviously, if we’re distributing it to other banks who’ve got the same problems as us, we’re going to find limited appetite.”

This underscored the need to onboard new investor classes to the trade finance ecosystem.

6. Looking ahead: The 51st ITFA Conference in Singapore 

As the 50th ITFA conference comes to a close, Edwards announced that the 51st annual conference will be held in Singapore, highlighting the association’s commitment to maintaining a global footprint and providing a platform for the industry to convene and address the evolving landscape of trade finance.

It’s essential to document the varied themes which emerged from the 50th annual conference, as the industry’s dynamic nature means that, come the 51st annual conference, these six topics will be almost unrecognisable.

The post VIDEO | ITFA Cyprus: The 6 hottest topics in trade and supply chain finance right now appeared first on Trade Finance Global.

At ITFA’s 50th annual conference in Cyprus, Trade Finance Global’s editor Deepesh Patel, sat down with NLN Swaroop, Global Product Head for Sustainable Trade Finance, Innovation, Financial Institutions, Capital Management and Asset Distribution, HSBC Board Member, Trade Finance Investment Ecosystem (ITFIE) at ITFA.

They discussed ITFA’s Trade Finance Investment Ecosystem—or ITFIE—an industry group of trade finance practitioners that focuses on developing trade as an asset class. 

The intention is to facilitate and expand how capital is brought to trade finance, by developing enabling frameworks and solutions.

The initiative should accelerate the rollout of trade finance solutions across the industry.

Swaroop detailed the parties involved in ITFIE: “We have a group of institutional investors, banks, fintech, and capital providers (such as pension funds, insurance treasuries, and family offices) coming together in this group and looking at challenges more closely in a collaborative way to find solutions for the future.”

Watch the full interview for more.

The post VOXPOP | NLN Swaroop on trade finance investment appeared first on Trade Finance Global.

Removing obstacles to lending is one of the easiest ways to increase trade. In this regard, education on credit insurance worldwide is vital.

To discuss further, Deepesh Patel, Editor at Trade Finance Global, was joined by Sian Aspinall, Group CEO at BPL and Chair of the Insurance Committee and Board Member at the International Trade and Forfaiting Association (ITFA), at ITFA’s 50th annual conference in Cyprus.

She spoke on ITFA’s responsibility to smoothen this education flow. “Now, with the regional committees that have been formed, [ITFA can] create that education by flowing through where all the expertise currently lies.”

It’s not just about cross-generational information, Aspinall continued. It’s about ensuring that education is “delivered to new nations so that everybody has equal access to the tools that can really make a difference, to trading on a global basis and change lives.”

To find out more, watch the full interview.

The post VOXPOP | Sian Aspinall on credit insurance education appeared first on Trade Finance Global.