Fintech as a catalyst for better global trade

Faisal Ameen, Bank of America’s head of global transaction services for Asia Pacific and Japan, recently shared his thoughts on how fintech can “change the future of global trade and supply chains,” in an article from Fintech Futures.

Many readers will know that fintech companies are by and large the source of most new technology solutions as banks move to the cloud over time. The piece from Fintech Futures starts with the ongoing uncertainty in supply chains and a call for continued digitization of the support solutions that facilitate global trade. We covered this same space with similar conclusions recently in member researchwhere we stated that “…other headwinds emerged during 2022, including inflation (energy costs are the biggest contributor) and rising interest rates. So while the disruptions are less severe than in previous years, uncertainty from various other factors will continue To a certain extent.”

The article then moves into blockchain, which remains enigmatic to many and is still primarily associated with bitcoin and crypto in general. The bottom line is that payments and controlled, secured transactions and contracts are rapidly moving into the commerce space via DLT, or as the author says “fintech solutions such as blockchain can facilitate the digitization and automation of customs and border clearance. A shift to greater transparency, security, verifiability and paperless processing will be welcomed by all.”

The article also touches on cross-border issues, which we also covered in the last article research. The bottom line is that fast settlement, transparency and security are key to cross-border trade, and many innovations are taking place in this area. Trade finance is also highlighted as an area for greater fintech modernity, which was explored in one of our previously mentioned articles.

Finally, the 5G technology area is mentioned as another opportunity as it can improve real-time monitoring and analysis capabilities, combined with other fintech technologies, equal to optimizing supply chains from production to final delivery. Overall, there is a good overview of areas where global trade can be stimulated by continued fintech development and integration.

Overview after Steve Murphydirector of commercial consulting at Javelin Strategy & Research.