Trade Finance Market Geography Outlook (Revenue, USD bn, 2019-2024)
- APAC - size and forecast 2019-2024
- Europe - size and forecast 2019-2024
- MEA - size and forecast 2019-2024
- North America - size and forecast 2019-2024
- South America - size and forecast 2019-2024
56% of the market's growth will originate from APAC during the forecast period. China is the key market for trade finance in APAC. Market growth in this region will be faster than the growth of the market in other regions. The growing support from governments to strengthen trade finance, for increasing exports will facilitate the trade finance market growth in APAC over the forecast period.
Trade Finance Market Instruments Outlook (Revenue, USD bn, 2019-2024)
- Traditional trade finance - size and forecast 2019-2024
- Supply chain finance - size and forecast 2019-2024
- Structured trade finance - size and forecast 2019-2024
The trade finance market share growth by the traditional trade finance segment will be significant during the forecast period. As the market is shifting toward an open account trade, enterprises are shifting toward supply chain trade financing. Traditional trade finance leads to an increase in the cost and complexity of operations for enterprises due to tightening compliance requirements and introduction to capital rules, such as Basel III. This leads to an increase in margin pressure over enterprises. Therefore, some vendors in the market are turning toward offering supply chain financing. The vendors are doing so due to growing globalization, which is leading to intense competition and more businesses opting for open account trade. This is encouraging vendors to offer new trade routes to enterprises. Thus, it will impact the growth of traditional trade finance during the forecast period.
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Trade Finance Market Driver
The rapidly increasing globalization and the reducing strictness on trade barriers by the World Trade Organization (WTO) will lead to an increase in exports across the globe, which, in turn, will lead to the growth of trade finance during the forecast period. During the exports, when shipment left the domestic customs, it can take a significant amount of time in transit before reaching the customer. The trade finance vendors will help domestic enterprises by providing them the value for their product as soon as the shipment leaves the domestic customs. These vendors offer the working capital, which would otherwise be remained stuck until the product is delivered. Trade finance aims to maintain a positive cash-flow cycle during product transit. These vendors also take care of the letter of credit, which is required when products are transported cross border to the buyers. This, in turn, helps in building up trust between the seller and the buyer and facilitates easy trade. Thus, with the growth in exports of products and services, the demand for trade finance will also increase during the forecast period.
Trade Finance Market Trend
Technology is an important part of businesses across industries, such as banking, financial services, and insurance (BFSI). Technological innovations, the adoption of automation, and a certain level of standardization have been achieved in trade financing in the last few years. For instance, the bank payment obligation (BPO) is an irreversible undertaking that is given by one bank to pay another bank on the successful matching of a mutually agreed set of data within SWIFT's trade service utility. This reduces manual processes, works as a risk mitigation tool, and helps optimize the working capital of banks.
Trade Finance Market Challenge
A trade war occurs when two countries act against each other by placing restrictions over the opposing country's imports or raising import tariffs. Trade wars can be a reaction to protectionism, which depends on government policies and actions to restrict international trade. A government of any country usually takes protectionist actions to protect their domestic businesses and jobs from foreign competition. This action can also be taken by governments to reduce or balance trade deficits, i.e., when the country's export value is less than its imports. Also, trade wars can occur if a country feels that its competitor nation is following unfair trading practices.
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Some of the Major Trade Finance Companies:
The report analyzes the market's competitive landscape and offers information on several market vendors, including:
- Banco Santander SA
- Bank of America Corp.
- BNP Paribas SA
- Citigroup Inc.
- Crédit Agricole Group
- Goldman Sachs Group Inc.
- HSBC Holdings Plc
- JPMorgan Chase & Co.
- Morgan Stanley
- Wells Fargo & Co.
The trade finance market is fragmented and the vendors are deploying growth strategies such as investing in advanced technologies and focusing on offering customized solutions to compete in the market.
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Trade Finance Market Scope |
Report Coverage |
Details |
Page number |
120 |
Base year |
2019 |
Forecast period |
2020-2024 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4% |
Market growth 2020-2024 |
$ 11.25 billion |
Market structure |
Fragmented |
YoY growth (%) |
4.98 |
Regional analysis |
APAC, Europe, MEA, North America, and South America |
Performing market contribution |
APAC at 56% |
Key consumer countries |
China |
Competitive landscape |
Leading companies, competitive strategies, consumer engagement scope |
Companies profiled |
Banco Santander SA, Bank of America Corp., BNP Paribas SA, Citigroup Inc., Crédit Agricole Group, Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase & Co., Morgan Stanley, and Wells Fargo & Co. |
Market Dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and future consumer dynamics, market condition analysis for forecast period, |
Customization preview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
Table of Contents
Executive Summary
Market Landscape
- Market ecosystem
- Value chain analysis
Market Sizing
- Market definition
- Market segment analysis
- Market size 2019
- Market outlook: Forecast for 2019 - 2024
Five Forces Analysis
- Five Forces Summary
- Bargaining power of buyers
- Bargaining power of suppliers
- Threat of new entrants
- Threat of substitutes
- Threat of rivalry
- Market condition
Market Segmentation
- Market segments
- Comparison
- Traditional trade finance - Market size and forecast 2019-2024
- Supply chain finance - Market size and forecast 2019-2024
- Structured trade finance - Market size and forecast 2019-2024
- Market opportunity
Customer landscape
Geographic Landscape
- Geographic segmentation
- Geographic comparison
- APAC - Market size and forecast 2019-2024
- Europe - Market size and forecast 2019-2024
- MEA - Market size and forecast 2019-2024
- North America - Market size and forecast 2019-2024
- South America - Market size and forecast 2019-2024
- Key leading countries
- Market opportunity by geography
Drivers, Challenges, and Trends
- Market drivers
- Volume driver - Demand led growth
- Volume driver - Supply led growth
- Volume driver - External factors
- Volume driver - Demand shift in adjacent markets
- Price driver - Inflation
- Price driver - Shift from lower to higher-priced units
- Market challenges
- Market trends
Vendor Landscape
- Overview
- Vendor landscape
- Landscape disruption
Vendor Analysis
- Vendors covered
- Market positioning of vendors
- Banco Santander SA
- Bank of America Corp.
- BNP Paribas SA
- Citigroup Inc.
- Crédit Agricole Group
- Goldman Sachs Group Inc.
- HSBC Holdings Plc
- JPMorgan Chase & Co.
- Morgan Stanley
- Wells Fargo & Co.
Appendix
- Scope of the report
- Currency conversion rates for US$
- Research methodology
- List of abbreviations
About Technavio
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