Rethinking global trade and supply chain finance

Global trade is in the midst of a transformation, driven by political and economic shifts, evolving regulations, and rapid technological advancements. Sanctions and tariffs are creating barriers, while free trade agreements offer new opportunities. Supply chains are being realigned, with businesses diversifying markets and currencies to mitigate risks. At the same time, digital technologies such as blockchain and artificial intelligence (AI) are reshaping how trade is conducted, making it faster, more secure and efficient. Despite the complexity, these disruptions also open doors for innovation and growth, particularly for countries in ASEAN and South Asia.  

New supply chain strategies for resilience  

The COVID-19 pandemic disrupted supply chains and led to the rise of ‘near-shoring’ to enhance resilience. As the world divides into trading blocs, companies are adopting ‘friend-shoring,’ realigning supply chains to countries with similar ideologies to reduce exposure to sanctions or tariffs. 

Shivkumar Seerapu, head of Transaction Services for Wholesale Banking at ING for Asia Pacific, stated, “At ING, we see diversification of invoicing currencies as a key outcome of shifting trade corridors, largely driven by tariffs and geopolitical uncertainty. While the US dollar has traditionally dominated global trade, alternative currencies like the euro, renminbi and yen are gaining ground.  

This trend presents both challenges and opportunities for businesses as they seek to manage trade risks.” 

Lessons from trade platforms  

Several trade platforms have attempted to digitise trade, but some notable failures, such as we.trade, TradeLens, and Marco Polo Network, have raised questions about the sustainability of their business models. These platforms struggled to gain sufficient adoption, limiting their impact.  

Seerapu explained, “The initial promise of these platforms was to revolutionise trade finance by leveraging blockchain and other technologies. However, the closed ecosystem of many platforms limited their benefits to participants, hindering broader adoption. The key to success lies in building interoperability between platforms and traditional banking systems.” 

New technologies are transforming trade  

The rise of technologies like generative AI (GenAI), blockchain, and machine learning is helping transform trade and supply chain finance by making processes more efficient, secure, and accessible.  

Seerapu highlighted, “GenAI is revolutionising trade finance by automating the creation and verification of trade documents. Blockchain enhances transparency by maintaining a decentralised ledger, reducing fraud risk, and supporting smart contracts. Machine learning is improving risk assessment by analysing trade data in real time.” 

Collaboration and digitalisation will shape the future of trade 

Global trade is clearly experiencing transformational changes so what can we expect in the future? There is likely to be more fragmentation in the near term and this will reduce trade volumes. Technology though will be the game-changer, and it will positively reshape the trade landscape. 

Seerapu stated, “Advancements in AI, blockchain, and decentralised finance will reshape the trade finance landscape. Groundbreaking solutions will democratise access to global trade, and digital solutions will attract new sources of capital. Regulation will play a key role in shaping the digital trade ecosystem.” 

Originally published in The Asian Banker: Opens in a new tabhttps://www.theasianbanker.com/updates-and-articles/rethinking-global-trade-and-supply-chain-finance