Devlhon Consulting Insights: Key Trends in Trade and Trade Finance in 2024
International trade trends and trade finance outlooks are evolving rapidly in the face of global geopolitical and economic challenges. The 2024 ICC Trade Register report, produced in collaboration with Boston Consulting Group (BCG) and Global Credit Data (GCD), offers a comprehensive analysis of the current landscape. This report highlights positive developments for the sector’s future, despite a slowdown in global trade of goods in 2023. Here, Devlhon Consulting explores the report’s key findings and future perspectives for businesses and financial institutions.
Shift Toward Intrablock Trade and Growth of Non-Dollar Transactions
Amid rising geopolitical tensions, trade flows are increasingly shifting within regional blocs. The report highlights an increase in transactions conducted outside the U.S. dollar, particularly with the growing use of the Chinese currency. This change reflects efforts to reduce dollar dependence and respond to more diversified monetary and trade policies.
Sectors in Decline and Those in Strong Growth
Traditional sectors such as energy, metals and mining, and agribusiness experienced a trade decline in 2023, while the automotive and aerospace sectors recorded double-digit growth. Service trade is also expanding, now accounting for a third of global trade, with strong growth in the Middle East and South Asia. These figures suggest opportunities for companies to position themselves in high-growth sectors while diversifying their geographic markets.
Challenges and Opportunities in Trade Finance
Despite high interest rates and international tensions, the trade finance sector continues to show strong resilience. Among the main threats identified, financial institutions cite risks related to trade flows disrupted by geopolitical conflicts and pressure on margins. However, investments in digital technologies and sustainable financing initiatives present sources of optimism for the coming years. In fact, 90% of banks reported a growing interest in digital solutions to enhance customer experience.
Technological Integration as a Growth Driver
The report also emphasizes the increasing importance of artificial intelligence (AI) and generative AI for improving data management, fraud prevention, and document verification. The adoption of these technologies could accelerate supply chain digitization and make trade finance more accessible to smaller companies. The MLETR (Model Law on Electronic Transferable Records) is cited as a key advancement, though 80% of experts believe that successful digitization will depend on collaboration across the entire trade ecosystem.
Risk and Sustainability: Growing Priorities
Sustainable finance is becoming a central focus, supported by environmental regulations like the European Union’s carbon border adjustment mechanism. More than 90% of financial institutions involved in sustainable finance report positive results, indicating that the focus on sustainability will only increase. In terms of risk, financial products such as letters of credit and export financing continue to show resilience to market disruptions, proving their low-risk nature for financial institutions.
Conclusion: Opportunities and Outlook for 2024 and Beyond
The findings of the 2024 ICC Trade Register report indicate that despite significant challenges, global trade finance remains a key and relatively secure sector. Banks and companies investing in digitization and sustainability will be best positioned to navigate the complexities of international markets. This report reiterates that low-risk transactions, supported by advanced technological solutions and sustainability initiatives, will drive stability and growth for trade finance players in an increasingly complex economic landscape.
For businesses, understanding these developments enables them to prepare for future opportunities while navigating a shifting geopolitical and economic environment.
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