Amid geopolitical shifts and regulatory pressures, trade finance is evolving into a more intricate and demanding landscape. To stay competitive, banks and corporates must modernise their international trade strategies – balancing compliance, agility and
innovation.
In 2024,
the global trade finance market was valued at $9.7 trillion and is estimated to grow at a CAGR of 3.1% from 2025 to 2034. While digital transformation is fuelling this expansion, navigating the digital terrain requires robust roadmaps to manage both emerging
risks and opportunities.
Finextra spoke with Andrew Bateman, executive vice president for lending at Finastra, to explore how innovation is reshaping corporate banking solutions for trade finance. The conversation covered essential technologies driving growth, and how institutions
are leveraging digital tools to better serve SMEs with working capital solutions.
Modernising trade finance operations through AI
Talking through how Finastra supports its clients to accelerate their digital transformation journey, Bateman says that artificial intelligence’s (AI) role in automating manual processes will continue to grow. The usage of AI assistants and chatbots powered
by generative AI (GenAI) and LLMs have rapidly increased, streamlining the customer interactions, and AI has been utilised internally to expedite manual processes and reduce human error.
He adds that when it comes to agentic AI, there are new possibilities on the horizon – but strategies must be implemented to optimise its potential: “Intelligent AI agents are doing more than just automating clicks on the screen, they are actually able to
analyse data and based on a number of different inputs and history; they are able to make smarter decisions and present things to the users, creating faster processing and compliance. There is a lot of opportunity for leveraging AI to help with the compliance
aspect.
“Agentic AI is playing a key part in the workflows in combination with GenAI, because you still want to be able to look at the contextual assistance and interface with the product. So, it's not just about adopting the agents in terms of workflows and driving
efficiency, but it's also for users to be able to interrogate, ask questions, pull the data out in a slightly different way. That entirely changes the user experience.”
Highlighting solutions that are not in any form new to financial services, but continue to have a significant impact on growth, Bateman draws attention to cloud-native architecture and APIs as key drivers towards microservices and interconnectivity, saying
that they “both enable integration, and the ability to build more around solutions”. He explains that through the customisation capabilities facilitated through cloud and AI, banks are better able to meet the needs of end-customers in corporate channels, who
can then “build on those technologies and differentiate themselves as well”.
Geopolitical and regulatory challenges
Keeping up with regulatory requirements and compliance is essential in all sectors of banking, and trade finance is no exception. Bateman states that the geopolitical tension and increase in tariffs add another layer of complexity to the already volatile
global economy.
“There are technical challenges in complexity of the regulatory environment, because fragmented regulatory frameworks across different regions or markets must be accounted for and adopted, which has an impact on banks’ trade and working capital systems.
There is this persistent challenge around interoperability and integration between these systems, as well as how you integrate across different jurisdictions. A lot of the global banks will use one platform, but then have different technical challenges to
address in each region”.
He clarifies that an integration layer is key for trade finance; there needs to be cohesion across systems for smooth cashflow, and that is where supply-chain finance and document management are critical to building up strategies within core systems and
ensure compliance needs are being met. They not only support smoother cash flow operations, but embed compliance into core banking strategies.
Bateman outlines several areas where banks need to strengthen their services to overcome obstacles in compliance, geopolitical tensions, and financial crime:
- Due diligence: Enabling real-time transaction monitoring to address cyber threats
- Digital documentation: Supporting electronic transferable records to streamline paperwork
- Data residency: Standardising laws around data residency to reach global harmonisation
He explains that to modernise front-to-back trade finance operations, banks must implement end-to-end digital workflows, leverage open APIs and smart architecture to enhance interoperability, and introduce agentic AI into automation processes.
“We focus on client centricity to drives adoption of all the capabilities in the system,” says Bateman, explaining how the user-centric approach is necessary for AI training. He states that providing more training not only makes the technology more intuitive,
but also drives adoption across systems and maximises AI’s capabilities within an operation.
Better servicing the SME and bilateral market for debt and working capital
SMEs continue to face barriers in accessing trade finance, often due to limited credit histories and a lack of cost-effective solutions. According to the
World Economic Forum, the trade finance gap has reached $1.7 trillion, with SMEs facing the brunt of this shortfall.
Bateman sees a clear opportunity for banks to empower SMEs through targeted lending products, such as:
- digital onboarding to streamline access,
- advanced risk profiling for more inclusive credit decisions,
- liquidity provision tailored to SME cash flow needs,
- speed to market to reduce funding delays, and
- ESG scoring to align with sustainability goals.
He adds that supply-chain finance plays a pivotal role in this transformation. It feeds directly into trade and lending products designed for SMEs, and is an “area where there's been tremendous growth and adoption as banks differentiate themselves by offering
those sorts of solutions”.
Bateman explains that there is an overlap between trade solutions and bilateral and SME lending, and by integrating them together in their SME-targeted products, banks can provide a holistic view of their business where trade flows and loans can be managed.
“Overall, I think key for the banks to service SMEs is around their own internal efficiencies,” the Finastra executive concludes.
What technologies will reshape trade finance?
For Bateman, anticipating the future of trade finance is both exciting and essential. He sees the sector poised for significant growth, innovation and transformation. While the industry remains robust, Bateman identifies several areas where change will be
most profound.
A key takeaway from the conversation is the transformative potential of agentic AI – autonomous systems capable of making decisions, monitoring transactions, and ensuring compliance in real time. He notes that AI as a whole will “accelerate the digitisation
of trade”, while tokenisation is another emerging force, already gaining traction in certain digital markets. It promises to streamline asset exchange and improve transparency across trade ecosystems.
Cloud and APIs will continue to reshape banking infrastructure, with open APIs breaking down monoliths into microservices, enabling faster innovation and integration. Bateman also highlights the evolution of regtech, helping banks respond more quickly to
complex regulatory demands.
He states that in corporate banking, corporate lending, or trade finance, integration is a clear focus – there is not one solution, but multiple opportunities for growth and efficiency.