global trade finance facts and figures
TRANSCRIPT
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GLOBAL TRADE FINANCE –
FACTS AND FIGURES
Huny Garg
Head of Trade and Supply Chain
SWIFT
The global
provider of
secure financial
messaging
services
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SWIFT
IN FIGURES
7.8 billion FIN messages per year (2018)
11,000+ SWIFT users
200+ Countries and territories
35.2 million FIN messages peak day (2018)
11.3% Increase in FIN traffic (2018)
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Change (2018 vs 2017)
Total (Cat
4+7)
3.0%
Category 7
2.6%
Category 4
5.0%
3
0
5
10
15
20
25
30
35
40
45
2012 2013 2014 2015 2016 2017 2018
Mil
lio
ns
SWIFT Trade Traffic Worldwide, 2012-2018
Source: SWIFT BI Watch
Change (2019 vs 2018)
Total (Cat
4+7)
6.3%
Category 7
5.8%
Category 4
8.3%
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3.6
3.8
4.0
4.2
4.4
4.6
4.8
2011 2012 2013 2014 2015 2016 2017 2018
Mil
lio
ns
SWIFT Trade Messaging Trend
GLOBAL TRENDS LIVE, DELIVERED MT 700 (ISSUE OF A DOCUMENTARY CREDIT)
4
2.7%
Volume of MT 700, 2011 - 2018
3.9% decline
in 2019
Value of MT 700, 2011 - 2018
2.4%
Source: SWIFT BI Watch
2011 2012 2013 2014 2015 2016 2017 2018
12.7%
10.2%
MT 760 – up 5.9% in 2019
MT799 – down 8.3% in 2019
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IMPORT TRAFFIC VS AVERAGE VALUE LIVE, DELIVERED MT 700 (ISSUE OF A DOCUMENTARY CREDIT)
5
75.0%
6.9%
5.8%
4.8%
3.7%
1.9%
1.9%
Import Traffic
523,302
520,535
469,515
741,377
774,891
785,847
1,902,062
0 500,000 1,000,000 1,500,000 2,000,000
Africa
Asia-Pacific
Central & LatinAmerica
Europe - Euro Zone
Middle East
North America
Europe - Non EuroZone
Average Value of L/Cs Sent by Regions (Converted to USD)
Import traffic vs Average value in 2018, split by region
Source: SWIFT BI Watch
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0.0 0.2 0.4 0.6 0.8 1.0
Sri Lanka
Indonesia
Vietnam
Taiwan
Hong Kong
Pakistan
India
China
Korea,Republic of
Bangladesh
Millions
2018 2017
* Growth (FY 2018 vs FY 2017)
* From countries with yearly volume of MT 700 greater than 10,000 since 2017 6
TOP IMPORTING COUNTRIES IN FY 2018 Live, delivered MT 700s sent
23.2%
19.6%
5.9% 5.1% 4.9% 4.2% 1.9% 1.1% 0.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Sri Lanka Nepal Indonesia Algeria Egypt Bangladesh India Philippines Mexico
Top Importers with the Highest Growth
-37.8% -21.7%
-15.6% -15.2% -14.0% -12.3% -11.4% -11.3% -10.9% -10.5%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
Iran Cuba Tunisia Turkey Australia UnitedKingdom
Lebanon SaudiArabia
Israel Nigeria
Top Importers with the Highest Decrease
Iran was the top importer with
the highest growth (+23.7%) in 2017
but had the highest decrease in 2018
3.9%
8.5%
4.2%
Source: SWIFT BI Watch
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EXPORT TRAFFIC VS AVERAGE VALUE LIVE, DELIVERED MT 700 (ISSUE OF A DOCUMENTARY CREDIT)
7
75.5%
9.5%
4.7%
4.3% 4.0% 1.0% 1.0%
Export Traffic
443,036
790,684
811,098
867,248
1,235,146
1,948,856
2,127,024
0 500,000 1,000,0001,500,0002,000,0002,500,000
Asia-Pacific
Central & Latin America
Europe - Euro Zone
North America
Middle East
Europe - Non Euro Zone
Africa
Average Value of L/Cs Received by Regions (Converted to USD)
Export traffic vs Average value in 2018, split by region
Source: SWIFT BI Watch
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0.0 0.2 0.4 0.6 0.8 1.0
Indonesia
United States
Taiwan
Korea, Republicof
Japan
Singapore
Hong Kong
India
Bangladesh
China
Millions
2018 2017
6.8%
2.7% 2.1% 2.0% 2.0% 1.6% 1.6% 0.4%
0.0%
2.0%
4.0%
6.0%
8.0%
Top Exporters with the Highest Growth
* Growth (FY 2018 vs FY 2017)
* From countries with yearly volume of MT 700 greater than 10,000 since 2017 8
Top Exporting Countries in FY 2018 - MT 700s received
-14.0% -13.9%
-9.6% -9.5% -9.3% -8.3% -8.0% -7.7% -7.1%
-5.4%
-16.0%
-12.0%
-8.0%
-4.0%
0.0%
Germany Canada Italy Brazil Hong Kong France Netherlands TaiwanSaudi Arabia Austria
Top Exporters with the Highest Decrease
4.2%
6.8%
Source: SWIFT BI Watch
1.6%
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CREDIT LENGTH OF L/CS RECEIVED LIVE, DELIVERED MT 700 (ISSUE OF A DOCUMENTARY CREDIT)
9
Volume of L/Cs Received by Credit Length, 2018
Percent Distribution of Exports by Credit Length per Region, 2018
0-30 days; 10.7%
31-60 days; 38.6%
61-90 days; 34.8%
91-180 days; 13.5%
> 180 days; 2.4%
6.2%
12.0%
7.4%
5.0%
6.6%
5.3%
7.3%
10.7%
30.7%
40.8%
38.3%
28.9%
30.7%
28.5%
34.6%
38.6%
37.7%
34.0%
32.3%
36.4%
36.8%
42.5%
37.8%
34.8%
21.1%
11.7%
16.6%
22.7%
20.5%
20.0%
15.3%
13.5%
4.3%
1.5%
5.5%
6.9%
5.3%
3.7%
5.0%
2.4%
Africa
Asia-Pacific
Central & Latin America
Europe - Euro Zone
Europe - Non Euro Zone
Middle East
North America
All Regions
0-30 days 31-60 days 61-90 days 91-180 days > 180 days
Source: SWIFT BI Watch
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Business Intelligence Services
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DIGITAL ECOSYSTEMS IN
TRADE FINANCE Seeing Beyond the Tech
BCG | SWIFT | ICC
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GLOBAL TRADE FLOWS ARE EXPECTED TO GROW FROM 2018 TO 2027,
REACHING US$25T
Bubble size depicts
intra-region trade volumes
Line size depicts
cross-regions trade
volumes for 2018
<=3%%
4-5%
>=6% Line/bubble
colour
represents
CAGR 2018-27 3%
3%
2%
4%
5%
1%
1%
4%
0%
2%
7%
3%
3%
7%
6%
3% 1%
5%
3%
7%
3%
2018-27
Note: Forecasts are at constant FX rates
Source: BCG Trade Finance Model 2018
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HOW IS DEMAND FOR TRADE FINANCE PRODUCTS CHANGING?
4%
13%
18%
39%
13%
19%
27%
30%
30%
81%
78%
61%
52%
32%
6% Supply Chain Finance
Receivables Finance
Documentary Trade
Import / Export Loans
Performance Guarantees
Reducing Growing Flat / No Change
Note: Views of corporates and banks
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Corporates' Views Banks' Views
WHAT ARE THE BIGGEST 'PAIN POINTS' FOR CORPORATES?
8%
7%
11%
32%
31%
46%
47%
51%
57%
65%
61%
46%
46%
43%
32%
7%
6%
3% 20%
27%
20%
40%
33%
20%
40%
13%
27%
20%
53%
40%
60%
53%
27%
Limited connectivity between parties involved
Highly paper-based, manual documentation
Complex processes and slow turnaround times
High transaction fees with limited transparency in pricing policy
33%
Limited access to credit 47%
Lack of ’one stop’ solutions 27%
Minor Pain Point
Not a Pain Point
Major Pain Point
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WHAT ARE THE BIGGEST 'PAIN POINTS' FOR YOUR BANK?
5%
6%
12%
20%
30%
33%
40%
36%
78%
66%
61%
57%
52%
Highly paper-based, manual documentation
High operational costs
2% Complexity of KYC/compliance
Limited connectivity between parties involved
Limited digitisation across different entities in a transaction
2%
Not a Pain Point
Major Pain Point
Minor Pain Point
Banks' Views
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Corporates' Views Banks' Views
WHAT WILL CORPORATES FIND VALUABLE FROM TRADE FINANCE ECOSYSTEMS?
16%
17%
28%
41%
45%
81%
64%
68%
52%
2% 82%
5% 55%
Digitised processes to reduce manual effort and turnaround time
2% Simplified and consistent
documentation, compliance, regulatory processes
1% Improved co-ordination between banks and facilitators
4% New innovative products/solutions
More transparent commercial terms / pricing
4%
35%
Greater choice / competition between banks
9%
18%
9%
9%
18%
18%
27%
27%
45%
55%
45%
64%
55%
45%
36%
36%
18% 64%
Not Valuable
Extremely Valuable
Mildly Valuable
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WHAT WILL YOUR BANK FIND VALUABLE FROM TRADE FINANCE ECOSYSTEMS?
16%
25%
28%
29%
34%
35%
84%
75%
72%
69%
65%
64%
Ability to streamline / digitise trade processes to reduce manual efforts
1%
1% Ability to provide more innovative products/solutions to customers
0% Ability to reduce operational costs
2% Ability to gain access to new customers
Ability to partner with other banks to share
development effort / costs and certain processes (e.g. KYC)
Ability to hedge risk of being left behind as technology develops 1%
0%
Mildly Valuable
Not Valuable
Extremely Valuable
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WHAT ARE THE BIGGEST BARRIERS TO THE DEVELOPMENT & ADOPTION OF
THESE ECOSYSTEMS?
3%
5%
20%
29%
35%
37%
36%
42%
50%
78%
68%
60%
60%
60%
58%
45%
2%
5%
50%
Lack of industry standards
Fragmentation of Trade Finance landscape
32%
2%
8%
Limitations in IT capabilities across
relevant parties
4% Maturity of necessary technologies
42% Lack of demand from or investment of corporates
62% 6% Bank concerns re: losing competitive
advantage or enabling new entrants
Lack of network effects
Scale of effort required for corporates to
adjust processes or adopt new technology
Lack of investment appetite of banks
Significant barrier
Not a barrier
Slight barrier
STANDARDS RELEASE 2020
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THE DETAILED IMPLEMENTATION AND DOCUMENTATION TIME LINE
Q1 Q2 Q3 Q4
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
2016
2017
2018 L/Cs
2019
2020 Guarantees /
standby L/Cs
Advance
Documentation
Advance
Documentation
Advance
Documentation
2020
Advance
Documentation
2020
UHB
Documentation
UHB
Documentation
SRG
Documentation
SRG
Documentation
LIVE
(LIVE) Not cat 7
LIVE Annual
Deadline
for CR
Annual
Deadline
for CR
Annual
Deadline
for CR
Annual
Deadline
for CR
Annual
Deadline
for CR
Vendor Test Bed
(VTB)
Readiness Portal
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Test & Training
(T&T)
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Vendor Test Bed
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(VTB) LIVE
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22
Worldwide webinars
SwiftSmart has specific modules and
training on category 7, SR 2018 (as of
January 2018) and SR 2020 (as of 2019).
TRAINING AND WEBINARS
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USEFUL LINKS
Standards Release Page
https://www.swift.com/standards/standards-releases/release-highlights?tl=en
Release Highlights Page
https://www.swift.com/standards/standards-releases/release-highlights?tl=en#topic-tabs-menu
SR 2018 documentation
https://www2.swift.com/uhbonline/books/public/en_uk/srg_20171222/index.htm
Advance documentation for SR 2020
https://www.swift.com/resource/category-7-advance-information-0
MT 798 V5 Specification
https://www2.swift.com/uhbonline/books/public/en_uk/s_corp_stdsmt_msg_impl_guid_vol_2_trd_fnc_std/index.htm
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