Gurkirpal S Ahluwalia, head of trade finance at Newgen Software Technologies Ltd, explores how banks can reimagine the trillion-dollar paper jam, mitigate risks and enhance customer journeys in the ever-evolving world of global trade.


For centuries, trade finance has influenced the world’s living standards, economic conditions, public policy and the degree of financial inclusion. It facilitates 80% of world trade and, according to survey reports, the global trade finance market size in terms of transaction value is expected to grow from US$4.16tn in 2023 to US$5tn by 2028, at a CAGR of 3.74%.

To keep up with the rising demand, financial institutions today are leveraging automation, digitisation, artificial intelligence and machine learning, bringing a wave of change. But despite their efforts, trade financing seems stuck in a time warp.

A trillion-dollar paper jam

By its nature, the trade finance process is heavily dependent on documentation and verification. One trade finance transaction can involve over 100 pages of documentation. The manual process and paper trails make the trade finance transaction not only error-prone but also expensive. The process also involves banks, insurance companies, logistic companies, regulatory bodies, importers, exporters and third-party verifiers, just to name a few. With workflows spanning across multiple parties, trade finance workflows become complex with the exchange of multiple documents and significant manual work. The different regulations across the jurisdictions only add to the complexity. The International Chamber of Commerce (ICC) has predicted that over 4 billion pages circulate in trade finance. Just imagine the amount of manual scrutiny involved.

Banks need the trade finance process to be cheaper and simpler. Leveraging technologies such as low code, process automation, artificial intelligence and robotic process automation can let them progressively reimagine the entire trade finance process.

Reimagining the trade finance process the low code way

Reimagine risk and compliance

Did you know? Manual compliance reviews consume nearly 30% of banks’ trade operations capacity.

Trade finance is subject to various types of risks, such as customer, political, currency fluctuations, fraud, liquidity and settlement risks. The complexity and volume of the transactions, lack of automation and time restrictions only add to financial crime risk. To better manage the multitude of risks and address the different layers of regulation, banks need a low code-based trade finance platform to solve their compliance challenges. An in-built business rule engine can make it easier for banks to automate risk profiling and define and customise policies and complex decision matrices.

Reimagine document handling

Did you know? Digitising the bill of lading (BL) can save direct costs of up to US$6.5bn.

To some extent, banks have eliminated physical documentation by digitising some components of trade finance operations, such as sanctions screening and data capture. This is still far off from operating a system-wide paperless trade finance process. A low code-based platform with content management capability can save banks from sinking into a quicksand of unstructured, multi-form content. Capabilities such as document digitisation, auto document checks and inbuilt validations for ICC Uniform Customs and Practice for Documentary Credits, Uniform Rules for Collections, etc, can significantly improve the flow of documents across all parties involved and decrease transaction costs. Intelligent process routing with an inbuilt delegation matrix can allow users to perform tasks quickly and accurately, significantly improving the productivity and efficiency of the trade finance process.

Reimagine customer journey

Did you know? Only 30% of financial institutions reported having “significant insight” into the friction points in the customer journey.

Low code-based platforms with process automation capability allow banks to easily orchestrate the user journey from origination on the customer portal to document submissions, verifications and real-time customer communications. Straight-through processing, wherever possible, can serve speedier outcomes. Automated workflows can result in faster turnaround time, and a unified front-end with back-end processes ensures seamless information flow, enabling a better employee and customer experience.

Reimagine legacy systems

Did you know? 60% of CROs state that IT obsolescence and legacy systems are an emerging risk in the next five years.

Legacy applications are not designed to integrate seamlessly with digital ecosystems and operate in silos. By leveraging a low code-based platform with a comprehensive integration ecosystem and pre-built connectors, banks can connect disparate applications, allowing data to be exchanged across the system. This unifies their core system with other applications such as treasury, credit bureaus, anti-money laundering and more.

Trade finance is complex, but banks don’t have to succumb to its complexity. Banks can reimagine how they handle different aspects of trade finance with low code, bringing agility, simplicity and modernisation to trade financing. It can streamline the end-to-end trade finance process to reduce friction, mitigate risks, improve decision accuracy and achieve better turnaround time.

Newgen’s trade finance platform, built on low code, is designed to address current and future trade finance challenges

Crafted with precision by industry experts, Newgen brings the best of process automation, content services, customer engagement, AI and blockchain capabilities packaged into one unified, comprehensive platform that will keep banks ahead of the competition.

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