What is your biggest frustration in Trade Finance?

We were also very curious to know what was your biggest frustration in trade finance. The votes give a clear picture, find out now.

Watch the recording and a summary of the webinar on this link.

Poll Results

Are you involved in Trade Finance and Treasury Management, and encountering challenges in your daily work? We wanted to hear from you about what frustrates you the most. There were a total of 65 votes, thank you all for voting!

Question: What is your biggest frustration in Trade Finance?

First observation

What we see is that the majority of respondents (71%) find themselves facing challenges related to too much administrative work in their daily trade finance activities. This suggests that administrative burdens are a significant frustration for treasurers involved in trade finance and treasury management.

In addition, much smaller percentages of respondents expressed frustration with banks offering less service (12%), while others (9%) mentioned their frustration with other peers ignoring them or uncertainty in the markets (8%).

View of treasuryXL experts

Alexander Fleischman (Nomentia)

“Start talking, start acting, and breathe new life into your trade finance flows!”

Trade finance trends, innovations and disruptions not only impact Corporate Treasury, but Corporations as a whole. Yet, this also means that the implicit costs of managing processes poorly – in particular, processes as “paper- and Excel-heavy” as trade finance processes go up constantly:

1. Ever more challenging economic conditions 
2. Increased difficulty to attract and retain talent 
3. Increased drive towards digitalisation & “APIsation” 

1.      Economic conditions 

Trade finance is the engine oil to the trade engine. If trade finance processes “stutter”, businesses start to stutter. Not only by advising on appropriate types of instruments early on in the process but also by ensuring timely updates on the current status of requests, approvals and issuances of instruments, Treasury can become a trusted and valued partner to the business as a whole. When conditions are tough, sub-par processes make them even tougher. A “well-oiled” machine (think workflow-supported, digital, well-integrated trade finance platform) on the other hand can act as an enabler to all kinds of efficiencies hidden in the depths of the respective process.

2.     Talent 

Do you really want to bury the new Treasury Manager you just hired under reams of paper and make them guess their choice within the first month on the job? No, you don’t. When talent is scarce, the implicit price tag attached to every hour spent by a member of your Treasury team on unnecessary tasks goes up. Consider that in your business case when selecting an alternate solution and there will literally always be a business case!

3.     Digitalisation & “APIsation” 

You do not need to wait for the magic trade finance solution to rule them all! Why not start now with what works now? If your system is called “Excel” today and your API is called “e-mail”, there is tremendous value to be gained, even if you can digitalise and automate only 80% of your instruments from day 1 or only connect to 3 out of 5 banks. Also: don’t wait for the all-encompassing Blockchain platform. The name of the game is “critical mass” and this has so far proven to be tough to reach for incumbents in the Blockchain/trade finance space. So, long story short: talk to us at Nomentia or talk to some other vendor out there BUT: start talking, start acting, and breathe new life into your trade finance flows!

My experience of the webinar Trade Finance Trends: Innovations and Disruptions.

We discussed many topics during the recent webinar. The conversational style of the webinar was great – and a lot of fun. A big difference to the usual “slideshows” and rather dry vendor-driven sales pitches I would say.

Besides that, the practical experience Gizem and Elvis brought to the table was very insightful. For example, a point Elvis made really stood out. Namely, how important it is to have a structured, well thought-through and clearly communicated process that includes Treasury/Finance in the process early on – for example, even during the bidding phase for a new deal. Without this framework, even the most sophisticated “tooling” won’t fix an otherwise sub-optimal workflow.

My view on the poll results

What can I say about the poll results that most treasurers are being frustrated that Trade Finance is too much administrative work? Well, that these results are perfectly in line with the pain points our customers and prospects share with us on a daily basis.

To provide two concrete examples:

• This week I talked to the trade finance manager of a retailer managing hundreds of Import LCs and bank guarantees, largely via e-mails and spreadsheets and several bank portals. The major pain points in this case are ensuring a proper audit trail, i.e., “who did what when and on the basis of which business reason?” and ensuring timely and accurate processing of incoming requests and tracking of active instruments with limited resources and also during holiday absences, sick-leave, etc. In their particular case, it has been manageable to date due to a relatively limited number of banks and relatively user-friendly bank portals but overall the process is still too scattered, too error-prone and not sufficiently digital.
• A few weeks back I had a discovery call with a one-man-Treasurer based in the Nordics. He manages roughly 1.000 guarantees issued by banks and credit insurers. He has done that in Excel for many years because upgrading to a proper solution is tough for him to manage on top of his daily responsibilities and so far he “gets by” somehow. He is now considering “starting small”, i.e. leaving all the fancy, API-stuff aside for the moment and instead focusing on the basics: a current overview of all instruments and associated facilities in a cloud-based tool, some ready-to-go reports to help him stay on top of available facilities, approaching due dates, incoming request etc. A smart start from which it is easy to progress!