While many aspects of trade finance have remained unchanged for centuries, at the start of a new decade a variety of drivers are offering the tantalising possibility of redefining the sector. Eleanor Hill, Editor, recently caught up with Jean-François Denis, Global Head of Trade Solutions and Network Management at BNP Paribas, to explore the changes on the horizon and how they might benefit corporate treasurers.
Eleanor Hill (EH): What do you believe will be the key trends impacting trade finance in 2020?
Jean-François Denis (JFD): In my view, there are four key trends that will impact the sector – they might not be revolutionary, but they are extremely important to pay attention to. The first is the geopolitical environment. As a result of international trade tensions, we are already seeing shifts in terms of trade routes and risks. As a result, corporates are looking for risk mitigation instruments to ensure that their international trading activity remains secure.
A second, ongoing, trend is corporate centralisation. While this is a long-standing treasury trend from a cash management perspective, it is now filtering into the trade world. Some large corporates are already centralised and use a bidding platform for guarantees, for example. And an increasing number of our clients are equipping themselves to have better visibility and control over their trade activities, using technology.