Trade finance: Clients prove slow to embrace digital
Although banks like talking about bringing digital services to trade finance, a surprisingly low proportion of the 7,000-plus participants in Euromoney’s annual trade finance survey are actually using the technology.
Asked about their usage of digital trade finance products in the Euromoney Trade Finance Survey 2018, very few group treasurers and CFOs said they were already operational.
Swift’s MT798 gained the highest response rate, with 28% of respondents saying they use the product. Meanwhile, the Bank Payment Obligation (BPO) recorded 23%, and electronic bills of lading saw 20%. Blockchain recorded the lowest take up of all, with just 6% stating they have used the technology.
Swift is responsible for much of the push towards change in trade finance, being behind both the MT798 and the BPO.
Huny Garg, Swift
Huny Garg, head of trade and supply chain at Swift, says the organization is pleased with the usage figures it has seen to date: “Some global corporates are adopting solutions like MT798 to streamline their communication with banks. MT798 has seen good year-on-year growth, with 36% volume growth in 2016 and 46% in 2017 so far, leading to more interest from banks to adopt as well.”
Swift says it is seeing a pick up in the use of BPO, but this is only happening in specific circumstances.