Trade finance is meant to make global trade easier. However, for European banks, financial institutions, and providers, operating and scaling trade finance in-house is far from easy.
Especially when banks either try and scale trade finance in-house or rely on multiple platforms for trade finance operations.
We are entering an era of more turbulence in trade, so simplifying and consolidating financial operations without increasing headcount is a smart, strategic move for European financial institutions.
TL;DR:
- The good news economically is: “Global growth is forecasted at a steady 2.8% through 2026, with varied recovery by region”, according to Allianz Trade.
- However, the unexpected re-election of US President Trump could soon re-ignite a global trade war with tariffs imposed across dozens of sectors and industries from Europe, China, and worldwide.
- As Josh Teitelbaum, a former Obama administration trade official said to GTR: “The era of a consensus in United States politics in support of the free movement of goods, people, and capital is significantly eroded today.”
- What could this mean for European financial institutions? We are potentially entering turbulent times, making trade finance more important than ever. Can European banks and financial providers scale trade finance operations without increasing costs?
Read on for more details 👇
Trade Finance Lifecycle: Originate, Risk Manage, and Reconcile
On November 7th in New York, LiquidX sponsored GTR US 2024 (Global Trade Review); one of many worldwide global trade finance events that GTR operates.
Both Dominic Capolongo, Chief Revenue Officer, and John Pfisterer, Managing Director, Global Head of Revenue Strategy held talks at GTR US 2024. It was a great opportunity to engage with other industry experts to exchange reflections on trade and working capital financing and risk management.
For European financial institutions, risk management is worth rethinking in a potentially changing global trade landscape as we look towards 2025.
European financial institutions need a trade finance lifecycle management platform they can trust.
With LiquidX, you can benefit from solutions that:
- Are white label. Find out more about the LiquidX Partner Program (LPP).
- Are platform agnostic, and can even help financial institutions and their clients monetize trade finance.
- Can take in any invoice format (e.g., XLSX, PDF, etc.), and use that as workable data downstream across the trade lifecycle.
- Manages the entire end-to-end trade lifecycle.
- Automatically digitizes assets in the front office (Trade).
- Manages portfolio, risk, position, and trade credit finance in the middle office (TradeHub).
- Make significant back office savings (TradeOps); up to 50% savings compared to in-house back office software.
- Can handle reconciliation challenges for global and regional banks and corporates (InMatch module).
- Can handle everything from the needs of global banks to asset managers.
- Is an award-winning trade finance solution: “Best Fintech for Trade United States 2024” Global Business and Finance Magazine
- Includes the advantages of a deep partnership with Broadridge (NYSE: BR), a trusted global fintech leader. Broadridge is LiquidX’s largest committed investor and strategic operational services provider for payment processing, account reconciliation, and global operational scalability.
Whether you’re just getting started in trade finance, or have been looking for an end-to-end white label solution for a while, we’ve got the solution.
5 Reasons European Banks & Asset Managers Trust LiquidX to Deliver
Here are 5 reasons why European financial institutions, banks, and asset managers trust LiquidX to deliver scalable trade finance fintech without requiring a significant long-term investment.
- Supports All Markets
For European banks, financial institutions, and providers, operating and scaling trade finance isn’t easy. You need a modular software solution, that supports every market you operate in, including different currencies and asset classes.
European financial institutions need a solution that can handle the end-to-end trade finance lifecycle, from origination to reconciliation.
- A Platform Agnostic Trade Finance Solution
Financial institutions operate on numerous layers and modules of platforms and technology.
When introducing any new fintech solution, there’s always a worry: Will this integrate well with everything else? The good thing is, LiquidX is completely platform agnostic.
This is an advantage over other solutions, as it means we can bring in data from any source thanks to our digitization capabilities. We don’t need to worry about digital compatibility with the banking systems or platforms a bank or other financial organization is using.
- Any Invoice Format & Data Source Format Accepted
Having a trade finance tech solution that can’t ingest and digitize every format that invoices and data come in isn’t much use.
Invoices and remittances come in various invoice formats: XLSX, PDF, etc. Trade finance managers in Europe need a solution that can seamlessly turn these different formats into workable data downstream across the trade lifecycle.
- Scale Trade Finance Without Increasing Headcount
Compared to other financial asset classes, trade finance is still too heavily reliant on emails, paper, and even fax, and is very tech-challenged. Banks that continue to rely on old methods and outdated in-house or custom-built software are going to be left behind.
However, many financial institutions are hesitant to invest a lot on new trade finance technology. The reasons for this include:
- Worrying about the timescale to deployment;
- The need to increase headcount to cope with new fintech;
- Will it be compatible with other software we already use, and every asset class, market, and invoice type?
As one alternative credit manager with approximately $3 billion in assets under management found, LiquidX solves those problems:
- 10 weeks from sign-off to launch;
- Integration with other software in their tech stack;
- A trade finance solution under their branding;
- A smooth-running turnkey front-, middle- and back-office operation that handles everything from ingestion to distribution.
- No increase in headcount is needed, and costs in-line with expectations while leveraging Broadridge’s capabilities.
- Automating Distribution for Asset Managers and Banks
Global banks ⏤ the ones that hold over $100bn in assets ⏤ are being targeted by the next, and final set of Basel Accord rules, known as Basel III Endgame.
Basel III is designed to make the world’s banking system more secure, even though vast amounts have been spent by the financial lobby to water down the rules, making it sound “like an ominously titled spy thriller sequel.”
One way we’ve responded to the needs of banks, with these changes on the horizon ⏤ and asset managers ⏤ is to automate the distribution of trade finance assets. Although banks are going to have to hold more capital on the balance sheet, the quality of that capital, and the risk factors of the loans they hold will come under greater scrutiny.
Between banks wanting to offload and asset managers getting into this space, an automated distribution module within LiquidX will make it simpler for both parties.
Key Takeaways: Scale Trade Finance in 2025 With LiquidX
In 2025, European financial institutions can scale trade finance with LiquidX’s white-label solution, which means they can:
- Scale trade finance without increasing headcount;
- Outsource the entire trade finance process to us;
- Grow and go after new markets and customers without increasing operational costs;
- Diversify trade finance revenue streams;
- Automate and create cost savings while you scale.
Work with a white label partner you can lean on, as numerous others have, and outsource your entire trade finance solution (or modules, as required), so that you can scale without increasing headcount.
European financial institutions: Find out more about the LiquidX Partner Program (LPP).
