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The trade finance market size is estimated to grow at a CAGR of 5.01% between 2022 and 2027. The market size is forecast to increase by USD 14,706.45 million. The growth of the market depends on several factors such as the growing number of exports, enhanced cash flows leading to business growth, and the emergence of clearing houses.
This trade finance market report extensively covers market segmentation by type (traditional trade finance, supply chain finance, and structured trade finance), end-user (importers and exporters, banks and financiers, and insurers and export credit agencies), and geography (North America, Europe, APAC, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
One of the key factors driving the trade finance market growth is the growing number of exports. There is an increase in exports across the globe due to factors such as the rapid increase in globalization and the reduction in trade barriers by the World Trade Organization (WTO) which is significantly contributing to the growth of the trade finance market. Additionally, the trade finance market players help domestic enterprises by offering them the value for their products as soon as the shipment leaves domestic customs.
Moreover, these market players offer the working capital which would otherwise remain idle till the product is delivered. The main objective of trade finance is to maintain a positive cash-flow cycle during product transit. Thus it builds trust between the seller and the buyer and enables an easy trade. Hence, such factors are expected to drive market growth during the forecast period.
A key factor shaping the global trade finance market growth is the adoption of structuring and pricing tools. Several market players in the global trade finance market provide risk and scenario analytics for hedging, real-time pricing, and capital management of multi-asset portfolios. Such risk and scenario analytics are tools and solutions for clients and investors who are planning to invest in particular markets and instruments.
Moreover, several financial professionals who deal with financial products utilize credit data and information to offer cash flow and analytics at a portfolio level. Thus, such kinds of practical processes enable the management of individual portfolios and prevent firm-wide risks through consistency, automation, and transparency through algorithmic trading. Hence, such factors are expected to drive market growth during the forecast period.
Lack of access to trade financing among SMEs is one of the key challenges hindering global trade finance market growth. There is a major challenge among small and medium-sized enterprises (SMEs) in accessing financing on affordable terms. There are financial issues for SMEs in both developed and developing economies but is significantly challenging in low-income countries.
Moreover, it is essentially due to the lack of interest among global trade finance market players to do business in these low-income countries due to the fear of financial instability. These SMEs have fewer guarantees, collateral, and credit history as compared with larger companies which makes it difficult for them to obtain finances. Hence, such factors are negatively impacting the market which in turn will hinder the market growth during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Trade Finance Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Australia and New Zealand Banking Group Ltd: The company offers trade finance such as ANZs trade and supply chain.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The traditional trade finance segment is estimated to witness significant growth during the forecast period. Traditional trade finance provides a broad spectrum of risk management tools and trade payment through products including commercial letters of credit, documentary collections, open account processing, purchase order management, and document preparation. One of the main market players which offers such a solution is JPMorgan Chase & Co. (JPMorgan).
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The traditional trade finance segment was the largest segment and was valued at USD 17,698.65 million in 2017. Thus, market players like JP Morgan &Chase offer traditional trade finance solutions through web-based trade transaction management platforms, which enable clients to manage their trade activities, from purchase orders to payments. The main advantage of this solution is that it enables sellers and buyers to connect with market players and offer them access anytime/anywhere, creates visibility, accelerates the payment cycle, and minimizes costs while optimizing the trade payment process. Furthermore, HSBC is another market player which provides traditional trade finance tools to clients, including corporations, government bodies, and institutions across the world. Hence, such factors are expected to fuel the growth of this segment which in turn will drive the market growth during the forecast period.
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APAC is estimated to contribute 34% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Another region offering significant growth opportunities to vendors is North America. One of the main factors which are significantly contributing to the growth of the global trade finance market in North America is the presence of top global exporters including the US and Canada.
Moreover, one of the leading exporters of capital goods including commercial aircraft, machines, and semiconductors, to Africa and Asia is the US. As a result, several market players in the region are forming strategic partnerships and alliances in order to increase their market reach and expand their customer base, and support trade in emerging markets. For instance, In July 2020, Citigroup extended its partnership with International Finance Corp., which facilitated financing for 4,600 trade transactions through 185 banks in 48 emerging market countries. Such partnerships allow the expansion of the availability of trade finance across the globe. Thus, factors such as increased benefits of trade finance services and the growing incorporation of technology is expected to drive the market growth in the region during the forecast period.
In 2020, during the COVID-19 pandemic, the growth of the global trade finance market witnessed a significant slowdown due to the suspension of the operations of banks and other financial institutions in North America. However, in 2021, the initiation of large-scale vaccination drives lifted the lockdown and travel restrictions, which led to the resumption of operations in banks and financiers. Such factors are expected to drive the market during the forecast period.
The trade finance market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Trade Finance Market Scope |
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Report Coverage |
Details |
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Page number |
176 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 5.01% |
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Market growth 2023-2027 |
USD 14,706.45 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
4.58 |
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Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 34% |
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Key countries |
US, China, Japan, South Korea, and UK |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Australia and New Zealand Banking Group Ltd., Banco Santander SA, Bank of America Corp., Barclays PLC, BNP Paribas SA, Citigroup Inc., Credit Agricole SA, Deutsche Bank AG, The Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase and Co., Morgan Stanley, NatWest Group plc, Societe Generale SA, Standard Chartered PLC, BNY Mellon Securities Corp., UBS Group AG, UniCredit SpA, Wells Fargo and Co., and Mitsubishi UFJ Financial Group Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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