A virtual roundtable in April, hosted by GTR and moderated by BNY, saw senior bankers explore how supply chain shifts, financing needs and digitisation challenges are reshaping cross-border trade across Asia Pacific.
Asia is often treated as a single trade region, yet in reality it encompasses some of the world’s most diverse economic and technological ecosystems.
Advanced manufacturing hubs, major export economies, fast-growing industrial markets and important logistics and transshipment routes are all reshaping how trade flows across the region. At the same time, geopolitical fragmentation, tariff pressures and supply chain diversification strategies are driving production and assembly across a broader network of markets rather than through traditional bilateral corridors.
Yet despite prolonged uncertainty and the associated reconfiguration of routes this has fostered, trade in Asia has remained remarkably resilient. Regional banks are adapting their approaches to support clients operating across more dynamic supply chains – developing new financing structures, recalibrating risk models and expanding corridor coverage – while global banking partners continue to play an important role in providing the connectivity, infrastructure and market access needed to support progressively complex cross-border trade flows.
“Receivables-based structures and buyer-led financing models are increasingly supporting more assembly-focused, second-tier supply chain activity.”
Aaditya Bhave, Kotak Mahindra
Against this backdrop, BNY’s Fabian Khoshbakht, head of global payments and trade APAC, moderated a panel featuring Aaditya Bhave of Kotak Mahindra, Sohfern Boey of Hong Leong Bank and Bernard Leung of China CITIC Bank International to explore how trade finance is evolving across Asia, from increasingly fragmented supply chains and changing financing needs to the practical realities of digitising trade across markets at very different stages of maturity.
Uncertain macroeconomics and shifting trade lanes
Despite continuing geopolitical disruptions, global trade is holding fast. According to the United Nations’ Conference on Trade and Development (UNCTAD), world trade grew by US$2.5tn in 2025, rising 7.5% to a record US$35tn – outpacing global GDP growth of 3.4-3.5%. Momentum continues into 2026, driven in part by strong cross-border trade and the rise of AI-related products in developing economies.
This positive picture doesn’t mean that trade corridors have stayed much as before. Asia, a far from homogeneous region, has become a highly complex landscape, with activity evolving in various ways for different jurisdictions. China, having been on the receiving end of numerous tariffs, has looked to diversify its export activity.
“We may not always have RMAs with every counterparty bank, which is where partnerships with banks such as BNY are becoming increasingly important for our collections, payments and letter of credit routing.”
Bernard Leung, China CITIC Bank International
“Traditionally, a few decades ago, we might be focusing on how China exports finished goods or services mainly to Europe or to North America, but nowadays it goes to everywhere in the world – South America, the Middle East, Africa, Eastern Europe and Asian countries,” explained Bernard Leung, head of trade finance, transaction banking, wholesale banking group, China CITIC Bank International Limited in Hong Kong.
Sohfern Boey, head of trade management at Hong Leong Bank, noted Malaysia, for its part, is well-positioned to ride on the shift in the global trade landscape, and to strengthen its position as a global transshipment hub, given its strategic geographical location and port infrastructure. Its strong economic and trade ties with China, its ASEAN neighbours, and the West provide the country with a competitive edge in the global export market.
India is seeing stronger trade flows in sectors such as electronics, chemicals and manufacturing – supported by both geopolitical realignment and domestic advantages. In March, for example, the Indian government announced that it had approved over US$750mn funding for electronic component manufacturing projects.
Participants reflected that most markets in Asia are shifting away from simple, bilateral trade toward more layered, multi-step supply chains.
The regional impacts
Across the roundtable discussion, a consistent theme was that banks are evolving in response to client behaviour – following customers into new markets and adjusting financing structures and servicing models to match changing trade patterns.
In response to greater fragmentation in supply chains, banks are adapting by broadening their geographic reach – developing new structures and recalibrating risk models to support less familiar markets and counterparties.
“While traditional trade products still play a central role in more direct trade flows, receivables-based structures and buyer-led financing models are increasingly supporting more assembly-focused, second-tier supply chain activity,” explained Aaditya Bhave, executive vice-president, head of trade product at Kotak Mahindra, India.
Leung similarly observed that the solution set is shifting – with rising demand for off-balance sheet financing structures, particularly across supply chain and payables finance – while the way banks provide global reach and corridor access is also evolving.
“In the past, we might not have been very familiar with countries like Brazil or even Argentina,” said Leung. “But nowadays, because our clients are doing business there, we need to get familiar with those countries.”
As banks follow clients into new markets, ensuring reach across trade networks is becoming more important – but also more operationally and financially demanding. Establishing and maintaining correspondent relationships and wider Swift connectivity require significant investment, particularly when supporting trade flows across emerging or less-established trade routes.
In response, partnerships between regional institutions and global banks are playing a larger role in extending reach, connectivity and infrastructure access across newer trade corridors. BNY, for example, supports clients through its correspondent banking network and global trade capabilities, including the support of clients’ letters of credit (LC) flows, LC advising, LC confirmation and LC discounting, facilitated through its Trade Network Access Service (TNAS).
“We may not always have RMAs with every counterparty bank, which is where partnerships with banks such as BNY are becoming increasingly important for our collections, payments and letter of credit routing,” explained Leung.
The realities of digitisation
Despite years of investment in trade digitisation, much of the industry continues to operate through fragmented systems, manual workflows and paper-based documentation. While banks and corporates are increasingly deploying digital tools to improve efficiency and visibility, differing levels of client readiness and limited interoperability continue to slow broader transformation.
Reflecting this reality, the roundtable’s moderator, Khoshbakht at BNY acknowledged that, unfortunately, the rise of new technologies is rarely an even process, with application across industries often patchy, unstandardised and disconnected. The trade sector, and the financial infrastructure supporting it, are no different – both remain heavily reliant on manual processes. Much of the shipping world, for example, continues to use paper – circulating an estimated 4 billion documents every day.
Participants stressed that one of the key challenges is the uneven pace of digital maturity across the market. “The reality is that clients are at very different stages of digital maturity,” said Boey. “Some are ready for fully digital journeys, while others still rely heavily on paper-based controls and manual processes.”
She added that bridging this gap – often between large global corporates with the resources to invest heavily in technology and smaller or mid-market businesses with more limited capabilities – is as much about changing mindsets and working habits as it is about technological adoption or standardisation.
“The reality is that clients are at very different stages of digital maturity. Some are ready for fully digital journeys, while others still rely heavily on paper-based controls and manual processes.”
Sohfern Boey, Hong Leong Bank
“Ultimately, the ideal end-state would be a bank-agnostic platform where clients can access multiple banks through a single interface,” added Bhave. “But achieving that will not be straightforward given interoperability challenges and the realities of existing business models.”
It means that until industry-wide digitisation becomes a reality, standardisation and interoperability will remain major challenges for trade, particularly where clients, banks and platforms continue to operate across different systems and levels of maturity. For Bhave, this requires banks to balance ambition with pragmatism by designing digital journeys that are simple, straight-through, scalable and, ultimately, responsive to differing levels of client readiness.
Innovation and AI
Drilling down into specific tools, the participants explored several technologies slated to transform global trade. Tokenisation, for example – the process of creating a digital representation of an asset on a blockchain, to signify ownership or value – is already being used in several scenarios, helping to support 24/7 trade, faster transactions, greater transparency, smart contract automation and fractional ownership.
Despite the potential benefits of tokenisation, however, the panel expressed caution, citing regulatory uncertainty across jurisdictions, interoperability issues between various blockchain platforms and even cybersecurity risks.
For these reasons, the participants broadly agreed that AI is the more immediate, practical innovation – and should be prioritised. “AI will be the groundwork for us. We need to bring processes and data to a certain level first, and then we can think about tokenisation,” said Bhave.
Khoshbakht argued that the strongest near-term use case for AI is in streamlining document-heavy trade processes, given the technology’s ability to reduce manual checking, identify discrepancies, and learn from previous transactions. Examples given included using AI to compare bank guarantee formats, reduce exceptions, and improve straight-through processing.
“Banks are investing heavily in AI because it will lead to more integrated, end-to-end, seamless processes,” he said. “The key is ensuring that the ultimate benefactor, the customer, feels the value of those investments. Packaging this together and telling a strong story is the way to maintain existing customers, gain new ones, and grow your book of trade transactions.”
“Banks are investing heavily in AI because it will lead to more integrated, end-to-end, seamless processes. The key is ensuring that the ultimate benefactor, the customer, feels the value of those investments.”
Fabian Khoshbakht, BNY
The evident enthusiasm for AI’s potential was offset by a note of caution. Khoshbakht characterised AI as “an enabler” of client service, as opposed to “a replacer” – outlining how the technology should be seen as a means to augment processes, rather than as a ‘silver bullet’.
“Before we get to AI, we cannot just assume that we have already arrived,” added Boey. “Systems need to learn from existing formats, accepted processes and workflows before those capabilities can be properly scaled.”
What do the next 12 months hold?
Over the coming year, banks’ priorities will include tracking evolving trade flows, managing risk in an increasingly volatile macroeconomic environment and pushing towards digitisation.
Speakers at the roundtable agreed that with geopolitical and tariff-related developments continuing to unfold, clients have not yet finished adjusting their supply chains or strategic priorities. This makes flexibility critical. Banks will need to track where trade is moving, support clients as corridors shift, and use data and technology more effectively to stay ahead of the curve. Though digitalisation and AI will continue advancing, it should happen in a measured way – and be led by client demand, operational readiness and the realities of the market.
Above all, banks need to closely track shifting customer needs and build out their service capabilities to navigate Asia’s highly fragmented, yet dynamic, trade landscape into 2027.
