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 tech solutions, as banks transition to cloud over time. The piece from Fintech Futures starts with the ongoing uncertainty in supply chains and a call for continued digitization of the supporting solutions that facilitate global trade. We covered this same space with similar conclusions recently in member research, where we stated that “…other headwinds arose during 2022, including inflation (energy costs being the largest contributor) and rising interest rates. So although disruption is less severe than in the prior several years, uncertainty from various other factors will continue to some extent.”
The article then moves into blockchain, which remains enigmatic to many and is still associated primarily with bitcoin and cryptos in general. The point is that payments and controlled, secured transactions and contracts are quickly moving into the trade space via DLT, or as the author says “fintech solutions like blockchain can facilitate digitisation and automation of customs and border clearance. A shift to greater transparency, security, verifiability, and paperless processing would be welcomed by all.”
The article also touches upon cross-border, which we have also covered in recent member research. The point being that fast settlement, transparency, and security are key to cross-border trade, and many innovations are taking place in that space. Trade finance is also highlighted as an area for greater fintech modernity, which was explored in one of our previously mentioned papers.
Finally, the 5G tech space is mentioned as another opportunity as it can improve real-time monitoring and analytics capabilities, combined with other fintech technologies equates to optimize supply chains from manufacture to final delivery. Overall, it’s a good across-the-board summary of areas where global trade can be energized by continued fintech development and integration.
Overview by Steve Murphy, Director, Commercial Advisory Service at Javelin Strategy & Research.