Letter of Credit Confirmation Market Size & Share, Global Trends Analysis by 2030 | Valuates Reports

The global letter of credit confirmation market size was valued at $3,918.8 million in 2020, and is projected to reach $5,094.7 million by 2030, registering a CAGR of 2.72% from 2021 to 2030. With an increase in global trade, the importers and exporters are largely taking protection measures toward their trade documents, in order to avoid risk of payments in the market. Moreover, due to lack of trust issues between an exporter and the issuing bank located in high political or economic uncertainty country, confirmation of letter of credit becomes a security mechanism during the pandemic situation.

A letter of credit is a document that gives protection to the buyers and the sellers during an international trade. It acts an evidence for executing payments & transactions for traded goods and services. Moreover, the letter of credit confirmation services are provided by the confirming banks, which are generally based in the country where the exporters reside. The confirmation on letter of credits is provided by the confirming bank, assuming that the terms & conditions for existing trade are fulfilled from the issuing banks. In addition, the payments are guaranteed by the buyer's bank, which is an issuing bank that further issues a letter of credit on behalf of the importer.

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The rise in demand for customized trade finance solutions and regulatory support in the growth of strict regulations for secured letter of credit confirmation services are some of the major growth factors in the market. In addition, with an increased risk of non-payment between the importers and exporters, the trader largely implements protection for their trade documents through the letter of credit confirmation services. Thus, this is one of the major factors fueling market growth. However, the online letter of credit confirmation procedures are prone to cyber-attacks and frauds such as loss of huge trade amounts and confidential data leakages. This is due to an involvement of several intermediaries between the issuer and beneficiary banks online, thus becoming crucial factors limiting the growth of the letter of credit confirmation market.

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Conversely, increase in business operations and global trading among small & medium enterprises, and large companies are providing lucrative opportunities for confirming banks to expand their business in the letter of credit confirmation services in the market. In addition, advancements in technologies such as distributed ledger technology (DLT) and blockchain are expected to provide lucrative opportunities in terms of creating real-time digitalized letter of credit contract, auto notifications alert over trades, and enhanced business efficiency in the upcoming years.

The large enterprises segment dominated the letter of credit confirmation market in 2019 and is projected to maintain its dominance during the forecast period. The large scale trade among firms from several industries such as healthcare, media & technology companies, power & utilities industries has led to the higher adoption L/C confirmation for facilitating trade activities. However, small enterprises are expected to provide lucrative opportunities for confirming banks & issuing banks in the upcoming years, owing to growing number of small businesses in developing economies.

With an increase in global trade, the importers and exporters are largely taking protection measures toward their trade documents in order to avoid risk of payments in the market. Moreover, due to lack of trust issues between an exporter and the issuing bank located in high political or economic uncertainty country, confirmation of letter of credit document is considered secure for trading globally. Therefore, traders are preferring letter of credit confirmation services, which is one of the major factors that boost the letter of credit confirmation market growth.

Developing economies offer significant opportunities for confirming banks to expand their business by strengthening their product offerings and to support the development of trade operations in the region. Due to emerging economies, increase in small & medium enterprises and rise in large companies scaling their business operations, are resulting in international trades. This provides lucrative opportunities for confirming banks to expand their business in the untapped potential markets in the coming years.

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Letter of Credit Confirmation Market by L/C Type
➣Sight L/Cs
➣Usance L/Cs

Letter of Credit Confirmation Market by End-User
➣Small Enterprises
➣Medium-sized Enterprises
➣Large Enterprises

Letter of Credit Confirmation Market by Region
➣North America
➣U.S.
➣Canada
➣Mexico
➣Europe
➣Germany
➣France
➣UK
➣Italy
➣Spain
➣Russia
➣Rest of Europe
➣Asia-Pacific
➣Japan
➣China
➣Australia
➣India
➣South Korea
➣Rest of Asia-Pacific
➣LAMEA
➣Brazil
➣Turkey
➣Saudi Arabia
➣South Africa
➣Rest of LAMEA

Key Players in the Letter of Credit Confirmation Market
➣Bank of America Corporation
➣Citigroup, Inc.
➣DBS Bank Ltd.
➣JPMorgan Chase & Co
➣Mizuho Bank, Ltd.
➣MUFG Bank
➣Scotiabank
➣Standard Chartered
➣Sumitomo Mitsui Banking Corporation
➣The PNC Financial Services Group, Inc.

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