Technologies And Trends Reshaping The Future of Global Trade
The global pandemic of Covid-19 has accelerated the speed of adopting digital technologies for businesses to further sustain in the market. It has made one thing very clear that businesses cannot afford to be dependent on traditional paper-based trade flows if they are seeking to construct a solid client base across the world in a post-pandemic period. Thanks to the sudden outbreak of the global crisis, the trade finance industry is considering DLT adoption amid COVID-19. Several technologies are playing a crucial role in keeping our economy resilient & functional in a post-pandemic period. Many of these technological advancements are expected to stay for longer. The way companies in all sectors and regions operate business has been significantly changed in the post-pandemic period.
As an initiative in this regard, G7 nations also formed an opinion of implementing electronic systems for processing trade documents within the next 18 to 24 months. This initiative would further trigger the incorporation & implementation of electronic and digital systems among global traders.
In this blog, we are explaining some of the top digital technologies & advancements that are helping to transform global trade and trade finance. Here they are as follows:
Electronic Signatures Are An Updated Way To Establish Trade Reliability & Save Time
Electronic signatures are faster, convenient & simpler than traditional wet ink signatures. They can be defined as a set of letters or characters highlighted in an electronic format to be used as a method of authentication of any data or information. A variety of forms can be used for an electronic signature including a digitized fingerprint, a retinal scan, a PIN, a scanned image of a handwritten signature or a name typed at the end of an email address, etc. Signatures in electronic format are beneficial in three ways for the parties engaged in a transaction. First, it identifies the sender. Secondly, it demonstrates the sender’s intent, and finally, it implies the reliability of trade documents.
Electronic Payment Undertakings (EPUs) To Digitize Payment Methods
The global traders involved in Various documents like Promissory Notes, and Bills of Exchange still use these traditional payment methods but it is changing too. Thanks to the Digital Negotiable Instruments (DNI) initiative launched by the International Trade and Forfaiting Association (ITFA), focused on fully digitizing various trade documents such as these by using the latest technology. Read, Are Digital Payments Upcoming Trend During Covid-19?
Blockchain Technology Can Streamline The Trade Finance Industry
Various trade organizations are using blockchain and blockchain-based distributed ledger technologies to update their traditional trade workflows. Recently, DBS and Standard Chartered launched a blockchain trade finance platform to curb trade finance fraud. From keeping track of records, and monitoring financial operations. They are putting their tremendous impact on addressing several global trade issues such as increasing costs or lack of transparency and safety etc. In addition to making efficient & reliable shipment of goods, this technology has the power to revolutionize the global trade finance industry by facilitating digital payments and paperless trade documents. Since it works on a decentralized ledger system, it is reliable, easy to use, and ensures transparency & interoperability. Blockchain-driven smart contracts are also getting popular as they can ease the tedious and long trade finance processes. For example, obtaining a Letter of Credit, one of the popular trade finance instruments in global trade.
Artificial Intelligence and Machine Learning Make Global Trade More Feasible
AI & ML are other digital advancements transforming global trade. From optimized trade shipping routes to save time & eliminate dilemmas for shippers to handle vessel & truck traffic at ports, as well as translate any e-commerce query from one language to another for allowing quick responses to the searchers, the technology is doing it all. Not only this, but it is also ensuring sustainable global trade. Take the example of Global Fishing Watch that was launched by Google in 2016. It is a real-time tool that uses ML to provide a global view of commercial fishing activities depending on ship movements and satellite data. It helps identify suspicious & illegal fishing activities.
Digital Trade Services and 3D Printing
Several digital trading platforms are available in the market which ensures easier & trustworthy trading for users by allowing them to find service providers from all over the world. Here, the customers can seamlessly connect with the online service providers and execute online trade transactions. On the other hand, the concept of 3D printing has also had a positive impact on global trade finance.
The global pandemic of Covid-19 has completely changed global trade & transactions. Now, companies are more aware of the fact that only the availability of digitization in trade workflows can help them survive in a post-pandemic world. It can make trade businesses operate their activities more rapidly and can provide intelligent trade finance solutions to cater to their client's needs within the evolving trade world.