B2B Payments

Trade Finance Revenues Slip $2.8 Billion At Top Banks

Top banking firms across the globe saw a $2.8 billion decline in transaction banking revenues in the first half of the year, marking a seven-year low for this area of banking, finds a new report from analysis firm Coalition.

Reports Tuesday (Sept. 19) revealed news that global transaction banking revenues jumped 4 percent year over year, hitting $18.6 billion for the first half of the year. The Americas and Asia led the increase, which also enjoyed a spike thanks to cash management revenues, which saw $11 billion in revenues in H1, a 7 percent increase and a six-year high. Coalition analysts pointed to an increase in deposit productivity.

Citigroup, HSBC and JPMorgan led the transaction banking and cash management increases, researchers noted.

But the drop in trade finance reflected a decline in commodities trade finance, with corporate customers reducing activity, especially in Asia, the report found.

The data was released just weeks after the Asian Development Bank that found the global trade finance gap to be worth $1.5 trillion, with small- and medium-sized businesses (SMBs) facing the greatest lack of access to trade finance services and products.

In a recent interview with PYMNTS, Traydstream CEO Sameer Sehgal explained that, traditionally, banks have been incredibly slow to innovate, especially in the area of trade finance. Recently, FinTechs have helped to fuel innovation and attention on the space as more traditional banks partner with alternative financial service providers. Technologies like blockchain and robotics, he said, could help to streamline trade finance processes, accelerate cash flow and improve margins for the banks.

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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