Banks need to better meet client needs: report

Demand for trade finance is growing with rising interest rates increasing profitability for trade finance providers.

But, many banks globally are struggling to meet trade finance clients changing requirements in a time of higher inflation and rising interest rates, according to a report by Accenture. The report is based on the findings of an online survey aimed at uncovering the challenges banks are facing both in retaining trade finance partners as well as how well they are holding up against competition from fintechs.

The survey was conducted with trade finance executives at companies with an estimated average $534m in turnover in trade, supply chain and structured trade finance in 15 countries across North America, Europe, the UK, Asia-Pacific and the Middle East.

Open account trading is responsible for about 80% of all international trade transactions.

However, globally, banks play a minimal role beyond clearing payments. The report found that there is still plenty of opportunity for banks to grow their trade finance businesses, provided they upgrade their digital strategies and go to market with the products clients are looking for.