AFP Payments Guides
AFP Payments Guide to What's New in Trade Finance
Underwritten by MUFG
Can you benefit by moving away from paper processes to digitalization?
This guide examines the state of trade finance, focusing on the two core trade products — letters of credit and documentary collections. It examines the innovations adopted and the hurdles that prevent wholesale digitalization of global trade finance that are yet to be overcome.
Digitization of Trade finance is evolving and will result in reduced errors, fraud prevention, access to more detailed reporting, and supporting environmental, social, and governance (ESG) priorities as it becomes a bigger impact on organizations.
Read more to find out:
CURRENT STATE OF TRADE FINANCE
Traditional trade finance techniques remain very labor intensive, with each transaction relying on the creation and subsequent exchange of a number of paper documents between multiple participants across different countries. The key processes in traditional trade are:
WHAT IS CHANGING IN TRADE FINANCE
At first sight, it might appear that nothing has changed in trade finance. Full digitalization of the core trade finance techniques still seems some way off. So, what is the state of the global trade finance market, and what hurdles still prevent digitalization? Learn more about:
THE FUTURE OF TRADE – THE BUSINESS CASE FOR DIGITALIZATION
There are many potential benefits to shifting trade finance from a highly time-consuming manual process to a fully digitalized one. These benefits fall into three main categories:
1. General benefits that derive from any digitalization process.
2. Reduces the incidence of fraud.
3. Help participants achieve their ESG objectives and results from trade finance’s use of multiple physical documents and the need to send them around the world.