Trade Finance Market Outlook, Critical Insights, Trends Analysis, Key Players And Forecast To 2033
Posted by Sushmitha on May 14th, 2024
Overview and Scope
Trade finance refers to techniques and instruments that facilitate trade transactions and protect both buyers and suppliers from the risks associated with international trade. It aims to make business transactions between companies smoother by mitigating risks like payment delays, quality discrepancies, and non-delivery of goods.
Sizing and Forecast
The trade finance market size has grown strongly in recent years. It will grow from .84 billion in 2023 to .48 billion in 2024 at a compound annual growth rate (CAGR) of 5.6%. The growth in the historic period can be attributed to globalization, rise in global trade, regulatory changes, economic uncertainty, shifts in supply chain dynamics.
The trade finance market size is expected to see strong growth in the next few years. It will grow to .64 billion in 2028 at a compound annual growth rate (CAGR) of 6.1%. The growth in the forecast period can be attributed to adoption of structuring and pricing tools, emerging market growth, sustainable trade and ESG (environmental, social and governance) considerations, geopolitical developments and trade policies, supply chain resilience and risk management. Major trends in the forecast period include blockchain integration, digital transformation, artificial intelligence (AI) and machine learning (ML), technology advancements, cross-border payment innovations.
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Segmentation & Regional Insights
The trade finance market covered in this report is segmented –
1) By Type: Supply Chain Finance, Structured Trade Finance, Traditional Trade Finance
2) By Service Provider: Banks, Financial Institutions, Trading Houses, Other Services
3) By Application: Domestic, International
4) By Industry: Banking, financial services, and Insurance (BFSI), Construction, Wholesale Or Retail, Manufacturing, Automobile, Shipping and Logistics, Other Industries
North America was the largest region in the trade finance market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the trade finance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
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Major Driver Impacting Market Growth
The rise in the need for safety and security in financial activities is expected to propel the growth of the trade finance market going forward. The security of financial activity refers to the measures and protocols put in place to safeguard financial transactions from unauthorized access, fraud, and theft. The need for safety and security in trading activities is on the rise due to increasing financial interconnectedness, necessitating measures to protect traders and transactions from evolving threats and risks. Trade finance facilitates secure payment mechanisms that ensure the timely and reliable settlement of trade transactions. It also provides access to trade credit and financing options that enable businesses to manage cash flow, mitigate liquidity risks, and expand their trading activities. For instance, in February 2024, according to the data released by the Federal Trade Commission, a US-based independent government agency, it was reported that consumers lost more than billion to fraud in 2023, marking the first time that fraud losses have reached that benchmark. This represents a 14% increase over reported losses in 2022. Nearly 1 in 5 people reported a financial loss due to an imposter scam. Therefore, the rise in the need for safety and security in financial activities is driving the growth of the trade finance market.
Key Industry Players
Major companies operating in the trade finance market are JPMorgan Chase & Co., China Construction Bank, Bank of America Corporation, Citigroup Inc., BNP Paribas S.A., HSBC Holdings plc, Mitsubishi UFJ Financial Inc., Credit Agricole Group , Union Bank of Switzerland, Deutsche Bank AG, Unicredit SpA, Societe Generale SA, Standard Chartered plc, Asian Development Bank, Internationale Nederlanden Groep, Development Bank of Singapore Limited, Nordea Group Abp, Euler Hermes Group, The Royal Bank of Scotland Group plc, The Bank of Nova Scotia, TD Bank, Coöperatieve Rabobank U.A., Commerzbank AG, Rand Merchant Bank, Arab Bank
The trade finance market report table of contents includes:
1. Executive Summary
2. Trade Finance Market Characteristics
3. Trade Finance Market Trends And Strategies
4. Trade Finance Market - Macro Economic Scenario
5. Global Trade Finance Market Size and Growth
...
32. Global Trade Finance Market Competitive Benchmarking
33. Global Trade Finance Market Competitive Dashboard
34. Key Mergers And Acquisitions In The Trade Finance Market
35. Trade Finance Market Future Outlook and Potential Analysis
36. Appendix
