Report Code: A15349 | Pages: NA | Mar 2023 | 1677 Views | ||
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Pandemic disrupted the entire world and affected many industries.
Get detailed COVID-19 impact analysis on the Commodity Trade Finance Market
Request Now !Commodity trade finance is the term generally used for funding the trade of commodities. It is concerned with activities related to domestic and international commodity trade financing. In addition, issuing letters of credit (LCs), receivables and invoice finance, credit agency, export finance, bank guarantees, insurance, and other services are all part of commodity trade finance. It is used to facilitate financing activities by buyers, sellers, manufacturers, importers, and exporters.
The main advantage of commodity trade finance is that it makes arranging short-term financing simple. Therefore, it is expected to boost the growth of the commodity trade finance market in the near future.
The global commodity trade finance market is segmented on the basis of type, service providers, end user, and region. Based on type, the market is divided into metals & mining, soft commodities, energy, and others. In terms of service providers, the market is categorized into banks, trade finance houses, and others. On the basis of end user, the market is segregated into exporters, importers, and traders. Geographically, the market is analyzed across several regions such as North America, Europe, Asia-Pacific, and Latin America, Middle East & Africa (LAMEA).
Top Impacting Factors
The advancement of technologies such as optical character recognition (OCR) to read container numbers, radio frequency identification (RFID), and quick response (QR) codes to identify and trace shipments and improving commodity trade documents through digitization drive the market growth.Â
The commodity trade financing market's growth is hampered by a lack of focus on SMEs, insufficient risk valuation capabilities, legal uncertainty, and operational inefficiencies. Contrarily, the rise in the use of advanced technologies for shifting from traditional banking methods for documentation to reduce paperwork, and improvements in the trade finance industry all provide opportunities for market growth.Â
Trade Document Through Digitization
The size of the commodity trade finance market is expected to grow as a result of digitization. A large volume of physical paper documentation is required for commodity trade finance procedures. Commodity trade finance providers are increasingly providing flexible, low-cost, and value-added services to their customers.Â
Banks are using digitization to automate financial and transactional information exchange through smart contract pilot projects. During the life cycle of a typical commodity trade transaction, it is subjected to numerous compliance checks, each of which incurs costs. Increased automation, combined with artificial intelligence (AI) and machine learning (ML), can help commodity trade finance cut costs and improve customer service.
Rise in Use of Technology Advancements
Blockchain, artificial intelligence (AI), machine learning, and robotic process automation are all expected to provide lucrative growth opportunities for the commodity trade finance market share. The application of blockchain to identity management and customer knowledge appears to be very promising. AI could be used to find ways to improve transaction efficiency or cross-channel marketing opportunities. Therefore, the rise in adoption of the internet-of-things and the blockchain-based platform is expected to foster the market growth of the commodity trade finance market in the upcoming years.
Key Benefits of the Report
COVID-19 Scenario Analysis
Questions Answered in the Commodity Trade Finance Market Research Report
Commodity Trade Finance Market Report Highlights
Aspects | Details |
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By Type |
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By Service Providers |
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By End User |
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By Region |
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Key Market Players | Industrial and Commercial Bank of China, China Construction Bank Corporation, Agriculture Bank of China, J.P. Morgan Chase, HSBC Holdings PLC, Bank of America, Wells Fargo, BNP Paribas, Mitsubishi UFJ Financial Group, Bank of China |
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