In partnership with the Bankers Association for Finance and Trade (BAFT), CGI recently released the 2024 BAFT Trade Technology Survey findings. This annual survey, which marks its fourth iteration, is pivotal in capturing the pulse of technology advancements in the global trade finance sector. As the landscape evolves, insights into shifts in technology investments, challenges, and potential opportunities become vital for effective strategic planning among banks and other organizations competing in this dynamic industry.
Reflecting on the current state of trade finance technology
This year’s survey underscores a critical period of adaptation and strategic realignment within the trade finance community. Financial institutions have increasingly shifted from reactive measures to proactive incorporation of innovative technologies into their operations, setting a new standard for the industry’s future.
As banks and the global trade industry have returned to a new post-pandemic normal, CGI and BAFT requested input surrounding technology priorities and investments within financial institutions’ trade organizations. After the consolidation of FinTechs last year, we saw a continued push to more targeted partnerships and solutions with FinTechs or third parties, driving more value for banks’ customers.
Based on the survey participants’ feedback, investments in innovation continue to compete for limited resources at trade banks, including ESG initiatives, digitization, compliance, SCF growth, and automation. While competition for investment may be challenging, most banks are still working with FinTechs and third parties, which is creating a trade ecosystem with a myriad of solutions for customers. Banks have also refocused on modernizing core back-office and front-office solutions to meet market needs and provide connectivity with technology partners.
Key findings from the 2024 survey
Barriers to innovation
Financial institutions report that budget constraints (37%) and limited resources (38%), including staffing and time, are the primary barriers to adopting new technologies. Additionally, 35% of respondents indicate that internal priorities, such as compliance and organizational changes, significantly impede innovation efforts.
Investment in technology solutions
The survey reveals a significant focus on Intelligent Process Automation (IPA) over the next five years, with 52% of respondents planning to invest in machine learning, natural language processing, and artificial intelligence. Notably, 26% of institutions also plan to invest in Environmental, Social, and Governance (ESG) technologies, highlighting a commitment to sustainable business practices.
Engagement with FinTechs
Collaboration with FinTech companies remains robust, with 40% of institutions working with supply chain finance providers. More than one-third of survey respondents also said they are utilizing digital document platforms and multi-bank platforms. And 25% said they are engaging B2B platforms such as Ariba, Salesforce and Tradeshift. Surprisingly, only 11% indicated they are working with blockchain providers, and a nearly equal percentage said they are not engaged with any FinTechs. Further, the data also shows that 80% of respondents plan to increase their engagements with FinTechs, signaling a strong move towards embracing digital transformation.
Satisfaction with FinTechs
A considerable majority (71%) of institutions are satisfied with their FinTech collaborations, indicating these partnerships are widely believed to effectively enhance operational efficiencies and drive innovation within the trade finance domain.
Analyzing trends and industry implications
The 2024 survey paints a complex picture of an industry at a crossroads between tradition and transformation. The emphasis on platform modernization and broad embracing of IPA solutions signals a reshaping of the industry. These technologies promise to enhance operational efficiency and create architectural solutions capable of handling the ecosystem-based future of trade finance.
Conclusion
The 2024 CGI-BAFT Trade Technology Survey provides a vital snapshot of the current trends and future directions in trade finance technology. As the finance and IT industries move toward a more digitized and sustainable future, CGI remains steadfast in supporting clients through this transition.
For further details and to explore how these insights may impact your business, download the full 2024 CGI-BAFT Trade Technology Survey Report for more insights and guidance on navigating the future of trade and technology.
About this author
Patrick DeVilbiss
Head of Product, Trade and Supply Chain Solutions
Patrick DeVilbiss is a subject matter expert in trade finance and supply chain finance, with a specialized focus on the areas of receivables and payables finance. He also delivers SaaS product management services to clients, defining client needs based on industry changes, platform metrics and ...
