Trade finance remains slowed by manual processes, paper documents, and persistent fraud, delaying operations by days and increasing risk. Emerging generative AI (GenAI) and agentic AI applications offer banks an opportunity to digitize critical workflows, improve efficiency, strengthen risk detection, and enhance customer experience, potentially transforming trade finance operations and creating a competitive edge in a rapidly evolving market, says Celent, a GlobalData company.
Based on conversations with trade finance banks, Celent found that manual operations continue to slow the processing of documents by 4 to 14 days. Moreover, trade-based financial crime continues to thrive. As a result, banks have a strong economic incentive as well as brand preservation motivation to adopt the next tech advancement.
While it is early days for GenAI and agentic AI applications, it is not too early for trade finance banks to begin exploring trade finance use cases.
Celent’s report, “The Quest to Digitize Trade Finance,” discusses which digitization breakthroughs are credible. Banks that succeed stand to not only lower costs but also improve customer experience and thereby gain market share.
Alenka Grealish, Principal Analyst at Celent, comments: “GenAI and specifically agentic AI represent the next milestone in digitizing trade finance. GenAI brings numerous ‘skills’ that could drive improvements in trade finance key performance indicators, ranging from efficiency to detection.”
Given the AI potential and current global macroeconomic trends, Celent offers five take-aways for banks striving to excel in trade finance.
Credit supply
The importance of trade credit availability as a critical decision factor in selecting a bank could grow. Banks that excel at expediting the application process and improving risk pricing will profitably grow their business.
Efficiency and agility
A reliable, efficient financial supply chain is paramount. Banks that can deliver will not only win new business but also deepen current relationships.
Trust and visibility
Banks that can deliver faster and better actionable trade finance analytics to their clients stand to gain market share.
Detection and risk mitigation
Companies will increasingly rely on their banks’ ability to authenticate, verify, and audit. For example, the importance of banks’ know your customer capabilities will rise. In addition, banks will play a critical role in identifying and mitigating new risks, such as new currency exposures.
Integration with the physical supply chain
New tariff enforcement will require tighter integration between physical and financial supply chains. If a bank can advise and facilitate integration, it will differentiate itself, particularly with the biggest book of business: multinational corporations. It would turn regulatory and logistical challenges into a strategic edge.
Grealish concludes: “Banks that implement GenAI will be able to achieve exponential scaling. Market share growth will require lower growth in ‘inputs,’ thereby improving the bottom line. In addition, the addressable market could grow as smaller companies, which historically did not find sufficient cost benefit in migrating to digital platforms, change their minds.”
Banking 4.0 – „how was the experience for you”
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