Financial institutions that can take the pulse of international trade are better equipped to go beyond basic trade finance to discover new growth opportunities.
Access to the latest cross-border commodity and import-export data is a “must” for banks to not only reduce risk and make better financing decisions, but to also realize potential profit. With up to 80 percent of worldwide cross-border trade funded by trade finance or credit insurance (Source: Import-Export Bank of the United States), the market potential is substantial, and best practices are critical.
What is Global Trade Finance?
Simply stated, trade finance provides the capital to drive global commerce. This can be raw capital, a letter-of-credit (LOC), highly structured finance offerings, a bank guarantee, insurance and more. Buyers, sellers and intermediaries use trade finance to address issues of solvency and liquidity as well as reduce the inherent risks in international trade.
Three Factors to Minimize Trade Finance Risks and Realize Profit
Much like shippers and intermediaries seek to reduce risk through trade finance, financial institutions are also eager to minimize liability. There are three angles at play to not only reduce risk but also to achieve excellence.
Leading banks are using market research to:
- Enhance the vetting process to confirm how and when shippers, manufacturers, carriers are moving goods. This step is an additional layer of due diligence beyond the basic credit check prerequisite to extend capital. With the right market research solution on hand, banks can gain an empirical perspective to verify how a shipper is moving product across borders, via which trade lanes and with which trading partners.
- Discover new business opportunities to better target qualified customers instead of responding to inbound inquiries. With a large number of institutions available to provide financing, banks cannot afford to passively react to requests for credit.
- Reveal competitive activities to identify how other banks are servicing the industry and in what capacity. The ability to view how the competition is operating in the market is a critical cornerstone of the opportunity assessment puzzle.
With these three factors at work, banks are better equipped to boost profit. It all starts with current, expertly reviewed, import and export information.
Descartes Datamyne™ for Banks, An Intuitive Trade Finance Platform
Designed expressly for the trade finance industry, Descartes Datamyne™ for Banks is an intuitive, web-based platform populated with the detailed trading activities and business profiles of U.S. importers, exporters and their trading partners. With current and accurate data on 600,000+ shippers sourced from maritime Bills of Lading (BOLs), banks can rapidly discover trends through intuitive filtering and reporting, locate new sources for business, analyze the competitive outlook and more.
Request a demo to take a closer look at the solution in action.