Global Trade Finance Market Research Report 2023

Trade Finance Market Outlook 2029
The global Trade Finance market was valued at US$ 8483660 million in 2022 and is anticipated to reach US$ 11631260 million by 2029, witnessing a CAGR of 5.4% during the forecast period 2023-2029. The Trade Finance market space has evolved, with the technological enhancements, switches in corporate behavior, regulatory reforms, and increasing market competition. The world trade finance market size is further expected to be augmented by increasing worldwide import and export. The rise in competition and new trade agreements, and improved inventory management by various companies propel the market growth.

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Trade Finance Market Trends

Digitization is expected to fuel the growth of trade finance market size. Trade finance procedures necessitate a large volume of physical paper documentation. As a result, document-related costs account for the bulk of Trade Finance costs. Banks' Trade Finance offerings must be adaptable, flexible, low-cost, and add value to their customers in order to succeed. Through digitization, banks are automating financial and transactional information exchange through pilot projects in smart contracts.

A typical trade transaction goes through numerous compliance checks during its life cycle, with each review racking up costs along the way. Increased automation, along with artificial intelligence (AI) and machine learning (ML), can help trade finance reduce overall operational costs and improve customer experience.

Technologies such as Distributed ledger technology (DLT) will allow stakeholders to digitally share accurate and reliable trade information, while smart contracts supported by DLT will allow automated execution of payments on meeting pre-defined conditions in the contract. This also means that reconciliation will no longer be a worry for banks as the ledger is shared and updated in real-time.

Furthermore, the incorporation of Blockchain, Artificial intelligence (AI), Machine Learning, and Robotic process automation is expected to provide lucrative growth opportunities for the world trade finance market size. The use of blockchain for identity management and know your customer appears to be very promising. AI innovation is also progressing at a breakneck rate. It, too, has a wide range of applications for solving real-world issues. AI may be used to identify transaction efficiency or cross-channel marketing opportunities, ensuring banks are making the best use of their capital.

Another growth-inducing factor is the use of electronic systems, such as optical character recognition (OCR), fast response (QR) codes, and radio frequency identification (RFID) readers, to improve the digitization of trade financing operations. In contrast to conventional methods, these devices help streamline the manual process of document recognition and simplify trade transactions.

Banks act as intermediaries in the commercial finance ecosystem to provide intercompany trade credits to purchasers, sellers, and other trading parties. Business support provided by banks and their ability to mitigate payment risk by buying trade credit insurance boost market growth.

Trade Finance Market Share Analysis
In terms of service types, Trade Finance can be generally divided into Guarantees, Letters of Credit, Documentary Collection, Supply Chain Financing and Factoring. In 2019, the proportion of Letters of Credit is the largest, accounting for about 39%.

Based on type, the Supply Chain Finance segment is expected to grow at the highest rate during the forecast period. Within the banking industry, Supply Chain Financing (SCF) is becoming a more popular vertical. Corporations benefit from SCF's working capital efficiency and cash conversion period advantages. It also gives banks the chance to form long-term partnerships and cross-sell goods. Data is gathered from industry analysts and peer analysis firms.

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Frequently Asked Questions About This Report
Trade Finance Market Segment by Type
Letters of Credit
Guarantees
Supply Chain Finance
Factoring
Documentary Collection
Other
Trade Finance Market Segment by Application
Finance
Energy
Power Generation
Transport
Renewables
Metals & Non Metallic Minerals
Other
Trade Finance Market Segment by Regions/Countries
North America
Europe
China
Japan
Southeast Asia
India
Central & South America

SIMILAR REPORT

https://reports.valuates.com/market-reports/QYRE-Othe-4N372/global-trade-credit-insurance

https://reports.valuates.com/market-reports/QYRE-Othe-3A258/non-bank-trade-finance

https://reports.valuates.com/market-reports/QYRE-Auto-25O2470/global-trade-promotion-management-and-optimization-solution

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This release was published on openPR.