How technology is driving efficiency and growth in trade finance

In a rapidly evolving trade finance landscape, global economic challenges have tightened banks’ technology budgets, hindering their ability to meet customer demands. To optimize their money at work, banks are increasingly partnering with third-party technology providers, leveraging their expertise to deliver superior products while maintaining high security and compliance standards.

Challenges in technology investment

Banks are facing significant budget constraints, with fewer reporting budget increases and more experiencing cuts, as highlighted in the 2024 Benchmark Report for Banks in Trade Finance commissioned by FIS Supply Chain Finance (formerly Demica). Many rely on aging technology, and struggle to keep up with evolving customer demands.

Banks are now often turning to third-party technology providers instead of in-house development, as specialized vendors can allocate more resources to platform development than many banks can manage internally. This allows banks to offer superior products with a better customer experience that still meet the stringent security and compliance requirements of banks.

Development priorities

The focus banks have on their customer experience was made clear in the benchmark report when many banks reported that ERP integration is considered critical for the success of their program. Banks strive to streamline data access and facilitate quicker onboarding and product delivery for their customers, and this is increasingly considered a must-have feature when using technology in trade finance transactions. While some banks are cautious about using APIs for integration, many technology vendors are exploring this secure option to modernize the market and improve implementation times.