A growing portion of B2B commerce goes through marketplaces, large and small. This forces suppliers and buyers adapt the way they interact and trade together. Prospecting, payments and credit management will never be the same again. And Trade Finance is reinventing itself for the marketplace era.
Beyond marketplaces, platformization is radically transforming the enterprise service stack: CRM is now a platform, so is accounting, so is invoicing… And so becomes banking. Platformization concentrates data into platforms, which can then be accessed and interpreted for new use cases – in particular for Trade Finance. Step by step, this will lead to a mapping of the B2B Graph, as we call it at EHDA.
3. SMEs FIRST
The race to provide powerful Trade Finance solutions to SMEs is largely underway and this results in a lot of product and marketing creativity, which is very inspiring for the entire industry. EHDA also sees it as the emergence of a new generation of sophisticated yet accessible solutions, that are more inclusive and will make the life of SMEs a lot easier.
4. SUBSTITUTION PRODUCTS
The boundaries between century-old products (letter of credit, factoring, TCI, surety) are about to explode due to new technologies which allow new value propositions to be designed and processes to be reinvented from scratch. This is not necessarily the sign of an uberization of Trade Finance, but possibly the beginning of an era where it will be more diverse and efficient.
5. DATA POOLING
With the platformization of accounting in particular, ledger / invoice data is accessible in unprecedented ways. In web-like ecosystems, several players start pooling this proliferation of data, step by step mapping the B2B Graph, as we call it at EHDA.
6. MACHINE LEARNING
Traditional models in Trade Finance are undergoing a fundamental reboot thanks to the augmented intelligence of human experts leveraging machine learning capabilities. We see this as one of the best illustration of the opportunity to partner between legacy players and Fintech / Insurtech innovators.
Banks and insurers participate in several initiatives to benchmark their respective predictions, for example regarding Prediction of Defaults. Trade Finance players can also leverage a similar coopetitive approach to improve the financing of supply chains.
Blockchain was all over the news after various letter of credit experimentations, but it may not be the most interesting application of this technology to Trade Finance. Sharing confidential data such as receivables or default predictions is sensitive, all the more when it involves complex regulated players – a problem where blockchain is particularly promising.