Strategies for Resilience and Efficiency in Trade Finance

Mitigating risk through intelligence

The landscape for international trade finance has grown increasingly complex in recent years, demanding heightened vigilance from treasurers and CFOs. Francesca Nenci, Head of Group Trade and Correspondent Banking, UniCredit, explains how strategic foresight, digital innovation, and rigorous, timely intelligence and analysis can help corporates and their treasurers to navigate these dynamics amid myriad geopolitical uncertainties.

Efficient international trade is built around a host of interdependencies, not least the nexus of trade finance, working capital, and credit risk. It’s a relationship that has become considerably more complex for treasurers and banks since the pandemic. Their vigilance remains crucial on these three intertwined fronts due to ongoing volatility, the continuing tough macroeconomic environment, and a fractured international landscape.

For trade finance leaders such as Nenci, these critical areas have presented many challenges and numerous headaches over the past few years. Along with other treasury professionals, she recalls that the pandemic was the clear initial trigger for an unprecedented disruption of trade finance and working capital globally, with the subsequent seizing up of supply chains exacerbating matters.

Nenci adds: “The initial signs of recovery across these areas post pandemic were, in fact, rather promising. However, this was deeply compromised by the dramatic upheaval of the geopolitical landscape in 2022 with the war in Ukraine swiftly followed by the Israel-Gaza conflict that flared up in October 2023. These developments have introduced further dimensions of complexity, influencing global trade flows and heightening risk perceptions among market participants.

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