GLOBAL TRADE FINANCE FACTS AND FIGURES

WE ARE THE WORLD BUSINESS ORGANIZATION. WE ARE THE WORLD BUSINESS ORGANIZATION

GLOBAL TRADE FINANCE –

FACTS AND FIGURES

Huny Garg

Head of Trade and Supply Chain

SWIFT

The global

provider of

secure financial

messaging

services


SWIFT

IN FIGURES

7.8 billion FIN messages per year (2018)

11,000+ SWIFT users

200+ Countries and territories

35.2 million FIN messages peak day (2018)

11.3% Increase in FIN traffic (2018)


Change (2018 vs 2017)

Total (Cat

4+7)

3.0%

Category 7

2.6%

Category 4

5.0%

3

0

5

10

15

20

25

30

35

40

45

2012 2013 2014 2015 2016 2017 2018

Mil

lio

ns

SWIFT Trade Traffic Worldwide, 2012-2018

Source: SWIFT BI Watch

Change (2019 vs 2018)

Total (Cat

4+7)

6.3%

Category 7

5.8%

Category 4

8.3%

https://www.swift.com/our-solutions/compliance-and-shared-services/business-intelligence/renminbi/rmb-tracker/document-centre


3.6

3.8

4.0

4.2

4.4

4.6

4.8

2011 2012 2013 2014 2015 2016 2017 2018

Mil

lio

ns

SWIFT Trade Messaging Trend

GLOBAL TRENDS LIVE, DELIVERED MT 700 (ISSUE OF A DOCUMENTARY CREDIT)

4

2.7%

Volume of MT 700, 2011 - 2018

3.9% decline

in 2019

Value of MT 700, 2011 - 2018

2.4%


2011 2012 2013 2014 2015 2016 2017 2018

12.7%

10.2%

MT 760 – up 5.9% in 2019

MT799 – down 8.3% in 2019



IMPORT TRAFFIC VS AVERAGE VALUE LIVE, DELIVERED MT 700 (ISSUE OF A DOCUMENTARY CREDIT)

5

75.0%

6.9%

5.8%

4.8%

3.7%

1.9%

1.9%

Import Traffic

523,302

520,535

469,515

741,377

774,891

785,847

1,902,062

0 500,000 1,000,000 1,500,000 2,000,000

Africa

Asia-Pacific

Central & LatinAmerica

Europe - Euro Zone

Middle East

North America

Europe - Non EuroZone

Average Value of L/Cs Sent by Regions (Converted to USD)

Import traffic vs Average value in 2018, split by region




0.0 0.2 0.4 0.6 0.8 1.0

Sri Lanka

Indonesia

Vietnam

Taiwan

Hong Kong

Pakistan

India

China

Korea,Republic of

Bangladesh

Millions

2018 2017

* Growth (FY 2018 vs FY 2017)

* From countries with yearly volume of MT 700 greater than 10,000 since 2017 6

TOP IMPORTING COUNTRIES IN FY 2018 Live, delivered MT 700s sent

23.2%

19.6%

5.9% 5.1% 4.9% 4.2% 1.9% 1.1% 0.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Sri Lanka Nepal Indonesia Algeria Egypt Bangladesh India Philippines Mexico

Top Importers with the Highest Growth

-37.8% -21.7%

-15.6% -15.2% -14.0% -12.3% -11.4% -11.3% -10.9% -10.5%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

Iran Cuba Tunisia Turkey Australia UnitedKingdom

Lebanon SaudiArabia

Israel Nigeria

Top Importers with the Highest Decrease

Iran was the top importer with

the highest growth (+23.7%) in 2017

but had the highest decrease in 2018

3.9%

8.5%

4.2%




EXPORT TRAFFIC VS AVERAGE VALUE LIVE, DELIVERED MT 700 (ISSUE OF A DOCUMENTARY CREDIT)

7

75.5%

9.5%

4.7%

4.3% 4.0% 1.0% 1.0%

Export Traffic

443,036

790,684

811,098

867,248

1,235,146

1,948,856

2,127,024

0 500,000 1,000,0001,500,0002,000,0002,500,000

Asia-Pacific

Central & Latin America

Europe - Euro Zone

North America

Middle East

Europe - Non Euro Zone

Africa

Average Value of L/Cs Received by Regions (Converted to USD)

Export traffic vs Average value in 2018, split by region




0.0 0.2 0.4 0.6 0.8 1.0

Indonesia

United States

Taiwan

Korea, Republicof

Japan

Singapore

Hong Kong

India

Bangladesh

China

Millions

2018 2017

6.8%

2.7% 2.1% 2.0% 2.0% 1.6% 1.6% 0.4%

0.0%

2.0%

4.0%

6.0%

8.0%

Top Exporters with the Highest Growth

* Growth (FY 2018 vs FY 2017)

* From countries with yearly volume of MT 700 greater than 10,000 since 2017 8

Top Exporting Countries in FY 2018 - MT 700s received

-14.0% -13.9%

-9.6% -9.5% -9.3% -8.3% -8.0% -7.7% -7.1%

-5.4%

-16.0%

-12.0%

-8.0%

-4.0%

0.0%

Germany Canada Italy Brazil Hong Kong France Netherlands TaiwanSaudi Arabia Austria

Top Exporters with the Highest Decrease

4.2%

6.8%


1.6%


WE ARE THE WORLD BUSINESS ORGANIZATION. WE ARE THE WORLD BUSINESS ORGANIZATION SWIFT Trade Messaging Trend

CREDIT LENGTH OF L/CS RECEIVED LIVE, DELIVERED MT 700 (ISSUE OF A DOCUMENTARY CREDIT)

9

Volume of L/Cs Received by Credit Length, 2018

Percent Distribution of Exports by Credit Length per Region, 2018

0-30 days; 10.7%

31-60 days; 38.6%

61-90 days; 34.8%

91-180 days; 13.5%

> 180 days; 2.4%

6.2%

12.0%

7.4%

5.0%

6.6%

5.3%

7.3%

10.7%

30.7%

40.8%

38.3%

28.9%

30.7%

28.5%

34.6%

38.6%

37.7%

34.0%

32.3%

36.4%

36.8%

42.5%

37.8%

34.8%

21.1%

11.7%

16.6%

22.7%

20.5%

20.0%

15.3%

13.5%

4.3%

1.5%

5.5%

6.9%

5.3%

3.7%

5.0%

2.4%

Africa

Asia-Pacific

Central & Latin America

Europe - Euro Zone

Europe - Non Euro Zone

Middle East

North America

All Regions

0-30 days 31-60 days 61-90 days 91-180 days > 180 days



WE ARE THE WORLD BUSINESS ORGANIZATION. WE ARE THE WORLD BUSINESS ORGANIZATION BUSINESS INTELLIGENCE OFFERINGS

Business Intelligence Services

10


DIGITAL ECOSYSTEMS IN

TRADE FINANCE Seeing Beyond the Tech

BCG | SWIFT | ICC


Co

pyright ©

2019 b

y B

osto

n C

onsulti

ng G

roup.

All

rights

reserv

ed.

GLOBAL TRADE FLOWS ARE EXPECTED TO GROW FROM 2018 TO 2027,

REACHING US$25T

Bubble size depicts

intra-region trade volumes

Line size depicts

cross-regions trade

volumes for 2018

<=3%%

4-5%

>=6% Line/bubble

colour

represents

CAGR 2018-27 3%

3%

2%

4%

5%

1%

1%

4%

0%

2%

7%

3%

3%

7%

6%

3% 1%

5%

3%

7%

3%

2018-27

Note: Forecasts are at constant FX rates

Source: BCG Trade Finance Model 2018


Co

pyright ©

2019 b

y B

osto

n C

onsulti

ng G

roup.

All

rights

reserv

ed.

HOW IS DEMAND FOR TRADE FINANCE PRODUCTS CHANGING?

4%

13%

18%

39%

13%

19%

27%

30%

30%

81%

78%

61%

52%

32%

6% Supply Chain Finance

Receivables Finance

Documentary Trade

Import / Export Loans

Performance Guarantees

Reducing Growing Flat / No Change

Note: Views of corporates and banks


Co

pyright ©

2019 b

y B

osto

n C

onsulti

ng G

roup.

All

rights

reserv

ed.

Corporates' Views Banks' Views

WHAT ARE THE BIGGEST 'PAIN POINTS' FOR CORPORATES?

8%

7%

11%

32%

31%

46%

47%

51%

57%

65%

61%

46%

46%

43%

32%

7%

6%

3% 20%

27%

20%

40%

33%

20%

40%

13%

27%

20%

53%

40%

60%

53%

27%

Limited connectivity between parties involved

Highly paper-based, manual documentation

Complex processes and slow turnaround times

High transaction fees with limited transparency in pricing policy

33%

Limited access to credit 47%

Lack of ’one stop’ solutions 27%

Minor Pain Point

Not a Pain Point

Major Pain Point


Co

pyright ©

2019 b

y B

osto

n C

onsulti

ng G

roup.

All

rights

reserv

ed.

WHAT ARE THE BIGGEST 'PAIN POINTS' FOR YOUR BANK?

5%

6%

12%

20%

30%

33%

40%

36%

78%

66%

61%

57%

52%

Highly paper-based, manual documentation

High operational costs

2% Complexity of KYC/compliance

Limited connectivity between parties involved

Limited digitisation across different entities in a transaction

2%

Not a Pain Point

Major Pain Point

Minor Pain Point

Banks' Views


16


Co

pyright ©

2019 b

y B

osto

n C

onsulti

ng G

roup.

All

rights

reserv

ed.

Corporates' Views Banks' Views

WHAT WILL CORPORATES FIND VALUABLE FROM TRADE FINANCE ECOSYSTEMS?

16%

17%

28%

41%

45%

81%

64%

68%

52%

2% 82%

5% 55%

Digitised processes to reduce manual effort and turnaround time

2% Simplified and consistent

documentation, compliance, regulatory processes

1% Improved co-ordination between banks and facilitators

4% New innovative products/solutions

More transparent commercial terms / pricing

4%

35%

Greater choice / competition between banks

9%

18%

9%

9%

18%

18%

27%

27%

45%

55%

45%

64%

55%

45%

36%

36%

18% 64%

Not Valuable

Extremely Valuable

Mildly Valuable


Co

pyright ©

2019 b

y B

osto

n C

onsulti

ng G

roup.

All

rights

reserv

ed.

WHAT WILL YOUR BANK FIND VALUABLE FROM TRADE FINANCE ECOSYSTEMS?

16%

25%

28%

29%

34%

35%

84%

75%

72%

69%

65%

64%

Ability to streamline / digitise trade processes to reduce manual efforts

1%

1% Ability to provide more innovative products/solutions to customers

0% Ability to reduce operational costs

2% Ability to gain access to new customers

Ability to partner with other banks to share

development effort / costs and certain processes (e.g. KYC)

Ability to hedge risk of being left behind as technology develops 1%

0%

Mildly Valuable

Not Valuable

Extremely Valuable


Co

pyright ©

2019 b

y B

osto

n C

onsulti

ng G

roup.

All

rights

reserv

ed.

WHAT ARE THE BIGGEST BARRIERS TO THE DEVELOPMENT & ADOPTION OF

THESE ECOSYSTEMS?

3%

5%

20%

29%

35%

37%

36%

42%

50%

78%

68%

60%

60%

60%

58%

45%

2%

5%

50%

Lack of industry standards

Fragmentation of Trade Finance landscape

32%

2%

8%

Limitations in IT capabilities across

relevant parties

4% Maturity of necessary technologies

42% Lack of demand from or investment of corporates

62% 6% Bank concerns re: losing competitive

advantage or enabling new entrants

Lack of network effects

Scale of effort required for corporates to

adjust processes or adopt new technology

Lack of investment appetite of banks

Significant barrier

Not a barrier

Slight barrier

STANDARDS RELEASE 2020


21

THE DETAILED IMPLEMENTATION AND DOCUMENTATION TIME LINE

Q1 Q2 Q3 Q4

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2016

2017

2018 L/Cs

2019

2020 Guarantees /

standby L/Cs

Advance

Documentation

Advance

Documentation

Advance

Documentation

2020

Advance

Documentation

2020

UHB

Documentation

UHB

Documentation

SRG

Documentation

SRG

Documentation

LIVE

(LIVE) Not cat 7

LIVE Annual

Deadline

for CR

Annual

Deadline

for CR

Annual

Deadline

for CR

Annual

Deadline

for CR

Annual

Deadline

for CR

Vendor Test Bed

(VTB)

Readiness Portal

My Standards

Test & Training

(T&T)

Test & Training

(T&T)

Test & Training

(T&T)

Vendor Test Bed

(VTB)

Vendor Test Bed

(VTB) LIVE


22

Worldwide webinars

SwiftSmart has specific modules and

training on category 7, SR 2018 (as of

January 2018) and SR 2020 (as of 2019).

TRAINING AND WEBINARS


USEFUL LINKS

Standards Release Page

https://www.swift.com/standards/standards-releases/release-highlights?tl=en

Release Highlights Page

https://www.swift.com/standards/standards-releases/release-highlights?tl=en#topic-tabs-menu

SR 2018 documentation

https://www2.swift.com/uhbonline/books/public/en_uk/srg_20171222/index.htm

Advance documentation for SR 2020

https://www.swift.com/resource/category-7-advance-information-0

MT 798 V5 Specification

https://www2.swift.com/uhbonline/books/public/en_uk/s_corp_stdsmt_msg_impl_guid_vol_2_trd_fnc_std/index.htm




























Thank you

GLOBAL TRADE FINANCE FACTS AND FIGURES

Documents

Transcript of GLOBAL TRADE FINANCE FACTS AND FIGURES