Related News

DBS and IFC sign global trade deal for emerging markets

ICC issues call for action on Trade Register as regulatory pressures bite

IFC joins Taulia as supply chain finance funder

WTO chief calls on development banks to help close trade finance gap

Sibos 2023: Top takeaways for trade from Toronto

The demise of correspondent banking relationships globally is leading to a lack of knowledge transfer amongst trade finance institutions, said speakers at the ICC Banking Commission annual meeting in Johannesburg last week.

“There is a shortage of trade finance expertise globally,” said Vijey Ananda, commercial director of the ICC Academy, speaking on a panel dedicated to the next generation of trade finance.

Joining Ananda on stage was David Morrish, relationship manager, international trade finance qualifications at ifs University College, who suggested that the “learning gap” that has emerged over the last 2 to 3 years is not as a result of one single reason, but rather a combination of factors. These include the decrease of core banking relationships (which is leaving banks in the developing world with a shortage of skills); a lack of investment in people at the early stages of their careers; and a reallocation of competitive advantage in the world, from developed to emerging markets (such as from China to Myanmar, which panellists found is lacking in trade finance skills). As a result, this potential across the globe must now be unlocked through learning courses such as those offered by the ICC Academy and ifs University College.

With less transfer of knowledge comes an increase of costs, which are brought about by operational inefficiencies and a lack of product offerings. “It’s the importers and exporters that get ultimately penalised for this,” said Hyung Ahn, global manager for trade and commodity finance at the International Finance Corporation (IFC), also speaking on the panel.

The importance of certification is critical to the future of the trade finance industry, speakers agreed. “In some parts of the world, it is a de facto licence to practice,” said Morrish. It provides a step change in knowledge transfer, he said, as it equips people with the things that they may not necessarily learn by doing the job.

“Certification goes a long way to levelling the playing field,” said Ahn, adding that the IFC accredits certification for providing the minimum standards of excellence. “It is not the end goal, but the starting point,” he said.

To better facilitate the transfer of expertise in the market, Morrish also advised that those at the end of their careers have a duty to impart their knowledge to those in their organisations before they retire.