Business Dimensions of Top Global Banks’ Trade Finance
Report Summary
Business Dimensions of Top Global Banks’ Trade Finance
Aite Group reveals key business dimensions of top global trade banks, and identifies success criteria for banks in the highly concentrated trade finance markets.
Boston, MA, December 3, 2008– A new report from Aite Group, LLC provides insight into the evolving internal structures at banks that consider trade finance an important line of business. It sheds light on trade finance reporting relationships, trade finance's contributions to annual revenue, and staff sizes in trade finance departments. The report looks at the composition of top global trade banks' customer base, and considers the types of trade finance that are being used by banks' clients. It also contemplates the impact of those forms of trade finance on banks' trade finance profitability now and within 18 months, and suggests opportunities for banks to enhance their trade finance businesses.
While banks of nearly all sizes provide trade finance services to their commercial customers, the market is extremely concentrated: The Top 40 global banks represent about 75% to 80% of the total trade finance activity worldwide. Conducted in Q2 and Q3 2008, Aite Group's global survey of 15 of the Top 40 global banks and four of the Next 60, reveals that trade finance is evolving as a business, but more slowly than many analysts projected. Over an 18-month time period, top global trade banks expect changes in clients' use of various trade instruments, but not enough to change the dynamics of clients' most often used trade finance methods. Still, the future of trade finance is tightly tied to banks' support of the financial supply chain.
"To be strong players in trade finance, banks need to plan for evolution away from traditional trade finance products and toward broader support for the financial supply chain," says Nancy Atkinson, senior analyst with Aite Group and author of this report. "While trade finance will want to leverage the investments made by other lines of business within their banks, trade finance brings much of the insight required to scope a true supply chain solution."
This 25-page Impact Note contains 20 figures. Clients of Aite Group's Wholesale Banking service can download the report.