Integrated finance revolutionizes world trade, which makes funding as simple as a click and empowerment of the previously locked SMEs of traditional systems.
Imagine a world where access to trade financing is as simple as click on a button, woven transparently in the online trade fabric. It is not a distant future; It is the promise of integrated finance (EF), and it transforms world trade.
Traditional commercial financing is often slow, complex and difficult to access, leaving many small and medium -sized enterprises (SMEs) which are struggling to obtain funding. EF offers a potential opportunity of several billion dollars to rationalize transactions and empower companies. By integrating financial services into non -financial platforms, EF allows companies to access financing options such as factoring invoices or financing of the supply chain at the transaction point.
The change in the way in which goods and services are purchased and paid are driven by the growth and infrastructure of the electronic commerce governed by the rules and protocols of application programming (API). APIs, blockchain and artificial intelligence (AI) are the main technologies behind EF. APIs allow the sharing of real -time data and rapid credit approvals, blockchain ensures the safety of transactions and AI automates risk assessment for faster funding. The AI also increases access to financing of SMEs, whether via EF integration into electronic commercial platforms or business purchase supply to business (B2B) Now pay subsequent services.
We already see the emergence of API EF as the treasure with plaid and stripes. Plaid connects to the bank accounts and Stripe connects to the cards. Both allow data sharing in real time and instant credit decisions, crucial for integrated commercial financing. Fintech are joined by large banks like HSBC and standard and standard and online giants such as Amazon, Alibaba and Paypal in the operation of this new company.
Future Market Insights projects EF income from $ 291.3 billion by 2033, compared to $ 63.2 billion in 2023. While the FE continues to mature, it has the potential to level the rules of the game, which allows companies of all sizes to participate in global trade and stimulate economic growth.
“Entrepreneurs build and innovate at the speed of the chain, but traditional banks have not been maintained,” said Shopify when he unified all of his financial solutions under the Shopify financing platform last October. In an entrepreneurship study Shopify-Gallup of nearly 47,000 entrepreneurs, 60% estimated the lack of funding as the biggest challenge they face.
To help remedy cash deficits to startups, Shopify Balance provides an alternative to the traditional commercial bank, offering merchants of the next day, while Shopify’s capital loans provide faster funding for eligible merchants, regardless of financial size and maturity.
Shopify is not the only new EF kid on the block. In November 2023, Freshbooks, which provided cloud-based accounting software for small businesses, joined Youlend to launch a flexible financing solution with more than 100,000 customers in the United States.
These platforms are well positioned for EF because they control the customer journey, accumulate rich data on transactions history and can integrate financial services transparently.
Large banks accelerate
EF displacement in electronic commerce does not occur in isolation; Traditional financial institutions also recognize the opportunity, stimulating collaboration between banks and financial technologies because they realize that they can achieve more together.
Last October, HSBC launched a company owned, SEMFI, in partnership with Tradshift, a global B2B network, to provide transparent EF solutions to companies on electronic commercial platforms. SEMFI incorporates HSBC’s payment and trade solutions on the B2B network of Tradshift, allowing SME suppliers to access faster and more transparent digital invoices in HSBC via e -commerce platforms.
Some banks build their own banking platforms as a service (BAAS). The Baas de Standard Charterd platform, which allows electronic commerce partners to offer their customers EF proposals, has led to the launch of the Audax platform, which incorporates the technological battery into other financial institutions.
BNY’s Trade Network Access Service (TNA) aims to simplify trade financing for other banks. Instead of managing complex systems for international transactions in itself, banks can connect to a global network via ANT, reducing costs and widening their scope. This Plug-Play approach facilitates small banks to offer sophisticated commercial financing services, ultimately benefiting their customers.
“Using risk attenuation and value -added financing services,” said Joon Kim, a global business financing manager, working capital and portfolio management at BNY Treasury Services, “ATN adoptaries can improve commercial income by accessing more than 4,000 [relationship-management applications] Around the world. The TNAs offer a distinctive value in a construction solution to construction in a field where the needs of a financial institution may not be consistent from day to day. »»
Although it is not a new concept in the financing of trade, the impact of EF could be felt throughout the transactional channel, from large to small financial institutions to their customers, says Kim.
“From the point of view of growth,” he says, “if you consider the limits of a small regional or community bank trying to reach networks which offer international access to an importer or an exporter, such access could lead to direct growth in the supply of any covering a fundamental access to end-to-end needs.” Efficiency and customer service improve when financing trade is a one -stop shop with a service without friction ranging from credit letters to commercial distribution.
“Innovation via digitization and collaboration has advanced industry and will only continue to move away from manual processes,” predicts Kim.
Where technology meets trade
Fintech XALTS based in Singapore, which trains AI agents in several commercial financing tasks, including documentary credit, guarantees and collections, bought the outline network of the digital commercial platform at the beginning of last year to rationalize digital connectivity between banks and businesses. Xalts first examines each problem with an agent, then dives deeply to introduce a fully vertical solution for funding teams.
“Because of our integrations with the main banks in the world and our expertise in commercial financing, we are the only company that builds vertical AI agents to resolve operational challenges in trade financing,” explains Ashutosh Goel, CEO of Xalts.
“The biggest obstacle to the digitization of commercial finances, and therefore to the offer of integrated commercial financing solutions, was the manual nature of commercial financing processes,” he adds. “With our AI agents and now the additional capacities [from Contour] To send commercial transactions to banks, we resolve operational challenges that support integration commercial financing solutions. »»
The XALTS platform is part of corporate resources planning software, accounting systems, logistics partners and banks, while its AI agents use large-language models to reduce integration times and costs for any platform. Agents consume data in an agnostic manner and results of the format according to the preexisting policies of the organization.
“This allows organizations to introduce new solutions,” continues Goel, “including integrated trade financing, in a transparent manner because operational treatment is simplified, because agents can manage end -to -end flow in any transaction: including sending banks.”
Online markets have led with regard to EF because they seek to integrate financial services into their ecosystems. The increase in customer satisfaction and loyalty also creates monetization opportunities.
Amazon and Alibaba offer each commercial finances, for example. Amazon does working capital loans to Amazon sellers via its Amazon loan program and other loan options, including daily advances, market advances and invoice financing.
Alibaba has teamed up with lenders, rating agencies and banks to provide commercial finances. It also extend the payment conditions up to 60 days for SMEs. Likewise, the PayPal rolling capital offers cash advances from $ 1,000 to $ 200,000 to new candidates – and up to $ 300,000 to the following candidates – based on their PayPal sales volume and their account history.
A more in -depth digitization and standardized commercial documentation, associated with rapid interoperability studies, promise to unlock the EF potential even more as more emerging offers.