By André Casterman, Founder and Managing Director, Casterman Advisory and Chair of Fintech Committee, ITFA

The ITFA Middle East regional committee gathered in February for a webinar concentrating on the recent – and upcoming – developments in digital trade solutions. For this purpose, Emirates NBD invited and joined a panel of experts representing DEWA, Microsoft, Traxpay and SMBC.

The panel concluded that “Trade digitisation is progressing at a rapid pace in the Middle East driven by the need to reduce delays and operational costs and to extend financing faster. There is more to be expected from the Middle East in the foreseeable future as regulators upgrade laws around electronic signature and electronic negotiable instruments.

Digitals solutions have become an important tool to manage and mitigate the outstanding inefficiencies of established trade finance practices. Digitisation is now widely recognised as the most relevant way to innovate and to solve real-world problems. Organisations have used available digital tools to face trade disruptions and fragility around their supply chains during the painful and continuing COVID crisis.

Which solutions are being embraced by corporates, government entities and banks in the Middle East? What is expected from policy makers to further enhance trust in digital solutions? What do corporate customers expect from new technologies and policies?

Panellists included Rahul Daswani, Group Finance Manager, New Solutions International, Microsoft; Subramanian Gopal Iyer, Senior Manager- Finance, DEWA; Ramakrishnan Ramaswamy, Senior Specialist- Finance, DEWA; Vikas Jha, Group Head Trade & Supply Chain Finance, Emirates NBD; Markus Wohlgeschaffen, Product Management, Traxpay; Sean Edwards, Head of Legal EMEA, SMBC & Chairman, ITFA.

Take-aways on adoption of digital solutions for guarantees by DEWA

Take-aways on adoption of additional solutions by corporates in the Middle East region

Poll 1 Q. Is your organization already using or adopting a technology solution for digitizing trade flows? 

Three options were offered: (1) Yes we are using one solution since some time; (2) Yes we are in the process of selecting one; (3) No we are not digitizing trade finance flows. The outcome of the poll showed a majority of respondents have adopted or in the process of adopting a digital solution for trade flows.

Take-aways about the new tools requested by corporate clients in the Middle East

Take-aways on the visibility and liquidity requirements

Poll 2 Q. What are the drivers for corporates to adopt digital solutions for their trade finance requirements? 

(1) improving user experience; (2) offering faster financing to suppliers; (3) increasing sales by funding clients. The outcome of this second poll showed that “offering faster financing to suppliers” is what drive adoption of digital solutions.

Take-aways on corporate expectations for the future

Take-aways on on-going regulatory developments

Poll 3 Q. Do you anticipate regulators within the Middle East either facilitating or enforcing the delivery of digital services in trade finance by adapting the laws or providing a common platform? 

(1) Yes the law will evolve soon or later; (2) Yes a common platform will be offered; (3) Nothing is to be expected from the regulators. The outcome of the poll showed that the market is indeed expecting the law to evolve soon.

Conclusion – digitisation in trade is increasing steadily

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