Trade Finance outlook

The prospect of facing into another year of significant platform changes led the industry to successfully defer SWIFT SR19 to 2020. However, from experience of implementing the relatively smaller SR18 changes, organisations should be planning to commence work in 2019 for the SR20 changes.

The implementation of the SR18 Changes to Documentary Credit messaging required complex, technologically intensive change programmes lasting for up to 12 months in many institutions. The industry has successfully lobbied to defer the planned SR19 changes to 2020 in order to complete detailed planning and preparatory works for these more comprehensive changes that will introduce six new message types, and modify ten more.

BCR remedies funding will enable challengers and new entrants to broaden their business banking offerings to include Trade Finance, aiming specifically at the high-growth SME segment. Unencumbered with legacy technology, the funding winners will bring competitive new solutions to market.

2019 brings unprecedented investment opportunities as the BCR administers the RBS Alternative Remedies Package. Pool A recipients of this funding have already been announced, and when matched funding is taken into account, we can expect c.£675 Million in investment to the SME Banking sector in the UK.

The recipients of BCR funding have made public commitments regarding their use of these funds – including the creation of new Trade Finance and Supply Chain Finance solutions. Unencumbered by legacy technology, we can expect that these entrants will rapidly introduce innovative and appealing solutions to the market, and the current market leaders will need to invest to maintain their status.

	Increased investment in trade solutions for SMEs
	New and innovative customer centric digital solutions
	Increased market competition
	More customer choice

Multiple Fintech start-ups and consortia have been working on innovative digital solutions for Trade. 2019 is likely to see a number of these achieve the level of maturity needed to offer a new way of doing business to customers.

Considerable effort was spent in 2018 moving new digital solutions for Trade, catalysed by blockchain, from proof of concept stage into market ready offerings. Along the way some of the solutions failed fast and others consolidated to combine strength. During 2019 we anticipate further maturation of these solutions with natural front-runners emerging and existing providers exploring ways to interact with and leverage these new offerings.

The Commercial Banking Showcase is an interactive experience, providing an opportunity to collaborate and share ideas on what the industry and customer journey will look like in the next three years, in light of evolving customer expectations, regulatory change, and evolving ecosystem.

The showcase brings to life innovative digital solutions for Trade Finance alongside Payments, Cash Management, Open Banking and many more.

We offer a breadth of capability that can support you with the end-to-end execution of your Trade Finance change programmes, from strategic design through to platform tailoring, digital innovation, migration and integration.

Operating model

• Trade strategy review and definition
• Trade proposition development
• Target operating model definition
• Trade operational process design
• Digital-First Operations

Technology delivery

• Blockchain, Digitisation, AI, Robotics and IoT enablement
• Platform architecture design
• Platform requirements elicitation, configuration and implementation
• Strategy and platform migration

Test and data services

• End-to-end platform testing
• Business acceptance testing
• Existing book profitability analysis
• Data services
• Integration services

To learn more about how the Deloitte team can help you to implement Trade Finance change, and to see some of our exciting Trade Finance developments in the Deloitte Digital Commercial Bank, please contact one of the team listed below.