Trade finance fuels trade; if firms are unable to access it, this can have significant consequences for business development and global commerce. The current US$1.5 trillion gap between the demand for and supply of trade finance is undeniably a substantial barrier to economic growth. A recent BNY Mellon survey canvassed industry participants to discover what steps they think should be taken to close the gap, and the results point to two potential sources of relief: technology and regulatory revision.
In spite of the recent rise of protectionism amongst major trade partners, international trade growth is strong, with emerging markets providing the main impetus. Trade growth could be even stronger if not for the shortfall in trade financing supply relative to demand, a gap that is partly due to regulation compliance. Technology is coming to the rescue, not only in addressing the trade finance gap but ameliorating operations throughout trade channels.