Basel IV capital rules are “accelerating the strategic importance of trade asset distribution” as banks seek new ways to optimise capital and manage increasingly scrutinised balance sheets, according to new research from the International Trade and Forfaiting Association (ITFA) and fintech Komgo.
The ‘Trade Asset Distribution: A Market at an Inflection Point’ report argues the reforms are reinforcing a shift already under way, with banks placing greater emphasis on return on equity, balance sheet discipline and active portfolio management.
Nearly half of lenders (46%) expect Basel IV to drive increased distribution activity, compared to 32% who do not and 12% who are unsure, according to survey responses from 50 banks collected between May and October 2025.
The paper described distribution as “increasingly embedded into origination and portfolio strategy decisions” rather than “a purely transactional activity”.
While the findings suggest trade asset distribution is already well established – some 82% of respondent banks are active in distribution, with 73% operating on both the buy and sell side – ITFA’s chairman, Sean Edwards, noted Basel IV was prompting banks to place “renewed focus on distribution as a tool for optimising risk-return dynamics”.
Nearly half (46%) of seller banks expect volumes to rise in the coming period, compared with 35% of buyers who expect volumes to hold steady.
As many as 63% of respondents predominantly use unfunded participation structures.
Guarantees, documentary credits and standby letters of credit are the most actively distributed unfunded assets, cited by 86%, 84% and 81% of banks, respectively.
Based on self-reported data, the report estimated the implied range of distribution volumes sold in 2024 at between US$60bn and US$530bn, and volumes bought at between US$32bn and US$280bn.
ITFA and Komgo said these were “directional indicators” rather than precise market-size estimates, noting absence of publicly available market-wide data and the “lack of a single universally accepted definition of trade distribution activity”.
Despite growing activity, the report argues the market’s ability to scale remains constrained by operational challenges.
The research found that 71% of banks still rely primarily on manual, email-based processes to execute distribution, with just three of the 50 respondents reporting fully digital systems for both internal workflows and investor connectivity.
And when asked which barriers constrained growth, 57% of banks said internal governance, followed by a lack of digital infrastructure (25%), staffing constraints (18%) and limited internal expertise (13%).
Izabela Czepirska, the report’s author and product manager at Komgo, said risk distribution in trade finance was “entering a new phase, where digitisation is no longer optional but essential”.
She added that many banks recognise the need to scale distribution but are “held back by manual processes, fragmented systems and limited connectivity with investors”.
The report also noted that distribution activities typically require coordination across legal, compliance, credit and front-office teams, creating “execution complexity and long approval cycles”.
Overall, sentiment on Basel IV impact remained split, with 53% of banks saying they were concerned or very concerned about its impact, versus 43% who were not.
