By Duarte Pedreira, ITFA Board Member and Chair of Emerging Leaders Committee

How many times have you heard a child or a teenager, or even someone in their early twenties say that their greatest aspiration is to become a trade financier? Never? Don’t worry, you’re not alone.

Let’s face it, if you ask a young child this question you will likely get some simple answer like sports star or singer, but as things start getting a bit more serious, answers like business owner or even banker can be expected. And as people come into higher education(that might be secondary school or university), those who decided to go down the business, management or banking routes will almost always want to go down a glamorous career path like private equity, M&A, capital markets or hedge funds. Well, I for one started my career as a hedge fund trader much on the back of the glamorous aura that existed around it…

So, the vast majority of people coming of age and looking at career choices have probably never even heard of trade finance and the good things we do collectively for the world as trade financiers. They know what equities, bonds and derivatives are, but rarely what a letter of credit or a pre-export finance facility are. Obviously, if they don’t have the opportunity to get to know the trade finance branch of the banking industry, they will not guess how great it is and devote their time and efforts into establishing a career path there.

As such, I personally think that the answer to the question we often ask ourselves as to why our industry often struggles to renovate and allow newcomers to benefit from the experience we’ve accumulated is pretty obvious – it’s a self-inflicted problem.

First and foremost, how many times did you personally find yourself enrolling a young member of your family and friends circle to follow your career path? Fair enough, maybe a few times? But how many times did you actually take the time to tell them about the important work that you do? Do they know for example that what you do is intrinsically linked to speeding up the timing in which we can all get rid of the COVID-19 pandemic? That you are in one way or another linked to PPE, life-saving ventilators and even vaccines being deployed globally? Do they also know that trade finance gives you access to new people, cultures, traveling, making friends around the world?

Young people often follow career paths that inspire them and that are meaningful to them. So, if you want to start solving the industry renovation issue, start with being inspirational to those around you.

Secondly, trade finance is a highly technical discipline and lots of specific knowledge needs to be shared with a prospective trade financier before s/he actually hits the ground running. I don’t really have a preference as to whether this should happen at secondary school or university level, or even on the job. But the reality is that trade finance is very (very!) often completely ignored in the teaching curricula and also often unfairly downplayed as being too dull and technical to be an attractive career choice (my introduction to trade finance was a 5 minute job at the end of a money markets lecture where the professor told a class of 200 aspiring bankers that trade finance was an old and boring career where people ended up working in offices filled with documents somewhere in a far corner of suburbia…) – we all know this is absolutely not true. But how much are we doing to make our knowledge available to others? How have we played our part in making sure that asides from inspiring people to join our exciting industry, we actually share our years of accumulated knowledge with them?

Thirdly, we also have to be realistic that decades of negative bias towards trade finance from the very banking industry that is the central pillar of our business did not help our cause. Trade finance and transactional banking were often seen as loss-leaders, thereby driving a certain neglect towards our industry professionals. Coming to the trade finance floor was a far less exciting thing than going into the markets trading floor at any institution. They had the noise, the balance sheet backing and the big bonuses. Then 2008 happened and not just banks, but the whole financial services industry, realised that transactional banking was the real deal, getting money where it was needed and, most importantly, goods and services where they were needed. So our industry attracted the attention of those private equity houses, hedge funds, insurance companies, trading companies, etc. As a result, we are now a lot more attractive as a profit centre than we were before. Only bonuses didn’t grow at the same pace… you can’t have it all!

So, as with anything in life, what matters is not to have a PhD in describing problems, but rather being astute in problem solving. At ITFA we feel the responsibility and duty of being the global representatives for the trade finance industry and have taken it upon ourselves to reverse this self-inflicted problem.

Over the last half decade or so, the ITFA Emerging Leaders initiative has gone from strength to strength in tackling the problem at root level:

The above are just some of the initiatives that we are consistently delivering in the fulfilment of our mission to prepare the next generations of trade financiers. Who’s leading this? You will never guess! It’s a group of 15 Emerging Leaders that are part of one of our most dynamic and enthusiastic committees – the EL Committee. They have benefited from our very earliest efforts to spread knowledge and dispel myths around trade finance and have now become teachers themselves. So, the lesson here is, if we want to have a chance of solving our self-inflicted problem, we should start by engaging those who are actually affected by it.

We’ve undoubtedly come a long way over the last 5 years. Perhaps a few more years of consistent delivery and one day you will hear the desired answer to that most important question – What do you want to be when you grow up? A trade financier!

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