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Deutsche Bank’s flow magazine has reviewed ITFA’s 50th annual conference, held in Cyprus, and highlighted the key themes discussed, in particular looking at how the digitalisation of trade finance instruments and tightening prudential regulation could be drivers for trade finance distribution and the quest for new sources of trade finance liquidity.

The review includes the panel in which Geoffrey Wynne participated as moderator, and which included Patrik Zekkar (CEO at Enigio), Sarah Green (Head of Digital Assets and Trade Finance at D2 Legal Technology) and Pierre Courquin (Head of Forfaiting at Société Générale). The panel assessed the current status of digital instruments as well as looking to opportunities and challenges ahead.

Some of the key themes which came out of the conference, include:

  • Geopolitical tensions reshaping trade: Ongoing geopolitical conflicts are driving shifts in global trade patterns, protectionism and security concerns, requiring deeper EU integration and WTO reforms.
  • Digitalisation of trade finance: The UK’s Electronic Trade Documents Act (ETDA) is a milestone in digitalising trade finance, allowing digital documents incuding bills of exchange to replace paper equivalents, improving speed, cost-efficiency, and security, particularly for SMEs.
  • Challenges in adoption: Despite legal frameworks such as ETDA, the full implementation of digital trade systems faces hurdles, such as industry reservations about reliable systems and the difficulty of changing established processes.
  • Trade finance as an asset class: The increasing role of trade finance distribution techniques and non-bank investors is critical for providing liquidity, particularly as new regulations such as Basel 4 put pressure on bank balance sheets.
  • Institutional investor involvement: Non-bank financial institutions are increasingly participating in trade finance through methods like Master Participation Agreements, though challenges like complex risk drivers and data transparency still limit wider adoption.

The article, as published by flow, can be read in full here.

For further information about the digitalisation of trade and trade finance, please contact Geoff Wynne.