Trade finance market: 4.98% annual growth rate in 2020 | By trade finance instruments and geography

Trade Finance Market Geography Outlook (Revenue, USD Billion, 2019-2024)

• APAC – size and forecast 2019-2024
• Europe – size and forecast 2019-2024
• MEA – size and forecast 2019-2024
• North America – size and forecast 2019-2024
• South America – size and forecast 2019-2024

56% of market growth will come from APAC during the forecast period. China is the key market for trade finance in APAC. Market growth in this region will be faster than growth market in other regions. The growing support from governments to strengthen trade financeas increasing exports will facilitate the growth of the trade finance market in the APAC region over the forecast period.

Trade Finance Instruments Market Outlook (Revenue, USD Billion, 2019-2024)

• Traditional trade finance – size and forecast 2019-2024
• Supply chain finance – size and forecast 2019-2024
• Structured trade finance – size and forecast 2019-2024

Growth in trade finance market share by traditional segment of trade finance will be significant during the forecast period. As the market moves towards open account trading, companies are turning to supply chain trade finance. Traditional trade finance leads to increased cost and complexity of operations for businesses due to stricter compliance requirements and introduction of capital rules, such as Basel III. This leads to increased pressure on corporate margins. Therefore, some vendors in the market are turning to supply chain finance offering. Sellers are doing this due to increasing globalization, which is leading to intense competition and more businesses opting for open account trading. This encourages vendors to offer new trade routes for businesses. Thus, this will impact the growth of traditional trade finance over the forecast period.

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Trade Finance Market Driver

Growing globalization and the reduction in the stringency of trade barriers by World Trade Organization (WTO) will lead to an increase in exports across the globe, which in turn will lead to the growth of trade finance over the forecast period. During exports, when the shipment leaves national customs, it may take a long time in transit before it reaches the customer. The trade finance providers will assist domestic businesses by providing them with the value of their product as soon as the shipment leaves domestic customs. These vendors provide working capital, which would otherwise remain locked in until the product is delivered. Trade finance aims to maintain a positive cash cycle while products are in transit. These vendors also take care of the letter of credit, which is required when products are transported across the border to buyers. This, in turn, helps build trust between seller and buyer and facilitates trade. Thus, with the growth of exports of goods and services, the demand for trade finance will also increase during the forecast period.

Trade finance market trend

Technology is an important part of companies in all sectors, such as banking, financial services and insurance (BFSI). Technological innovations, adoption of automation and a certain level of standardization have been achieved in trade finance in recent years. For example, the bank payment obligation (BPO) is an irreversible commitment made by a bank to pay another bank upon a successful match of a mutually agreed data set within SWIFT Trade Service Utility. It reduces manual processes, works as a risk mitigation tool and helps optimize working capital for banks.

Trade finance market challenge

A trade war occurs when two countries act against each other by imposing restrictions on the oppose imports from the country or increase import tariffs. Trade wars can be a reaction to protectionism, which depends on government policies and actions aimed at restricting international trade. A the government of any country usually takes protectionist measures to protect its domestic businesses and jobs from foreign competition. This action can also be taken by governments to reduce or balance trade deficits, i.e. when the value of the country’s exports is lower than its imports. Additionally, trade wars can arise if a country feels that its competitor country is following unfair trade practices.

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Some of the major trade finance companies:

The report analyzes the competitive landscape of the market and offers information about several vendors in the market including:

• Santander Bank SA
• Bank of America Corp.
• BNP Paribas SA
• Citigroup Inc.
• Crédit Agricole Group
• Goldman Sachs Group Inc.
• HSBC Holdings Plc
• JPMorgan Chase & Co.
• Morgan Stanley
• well Fargo & Co.

The trade finance market is fragmented and sellers deploy growth strategies such as investing in advanced technologies and focusing on offering customized solutions to compete in the market.

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Contents

Summary

Market landscape

• Market ecosystem
• Value chain analysis

Market sizing

• Market definition
• Market segment analysis
• Market size 2019
• Market Outlook: Forecast for 2019 – 2024

Five forces analysis

• Summary of the five forces
• The bargaining power of buyers
• Bargaining power of suppliers
• The threat of new entrants
• The threat of substitutes
• Threat of rivalry
• Market state

Market segmentation

• Market segments
• Comparison
• Traditional Trade Finance – Market size and forecast 2019-2024
• Supply Chain Finance – Market size and forecast 2019-2024
• Structured Trade Finance – Market size and forecast 2019-2024
• Market opportunity

Customer landscape

Geographic landscape

• Geographic segmentation
• Geographic comparison
• APAC – Market size and forecast 2019-2024
• Europe – Market size and forecast 2019-2024
• MEA – Market size and forecast 2019-2024
• North America – Market size and forecast 2019-2024
• South America – Market size and forecast 2019-2024
• Main leading countries
• Market Opportunity by Geography

Drivers, challenges and trends

• Market factors
• Volume Driver – Demand Driven Growth
• Volume Driver – Supply Driven Growth
• Volume Driver – External Factors
• Volume Driver – Shifting Demand to Adjacent Markets
• Price Driver – Inflation
• Price Driver – Moving from lower priced units to higher priced units
• Market challenges
• Market trends

Supplier Landscape

• Insight
• Supplier Landscape
• Landscape disturbance

Vendor analysis

• Suppliers Covered
• Positioning on the supplier market
• Santander Bank SA
• Bank of America Corp.
• BNP Paribas SA
• Citigroup Inc.
• Crédit Agricole Group
• Goldman Sachs Group Inc.
• HSBC Holdings Plc
• JPMorgan Chase & Co.
• Morgan Stanley
• well Fargo & Co.

Annex

• Report scope
• Currency conversion rates for the US dollar
• Research methodology
• Abreviations list

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