2024 Trade Credit And Trade Finance: End-of-year Business Review – Financial Services – Finance and Banking
W
WTW
At WTW, we provide data-driven, insight-led solutions in the areas of people, risk and capital that make your organization more resilient, motivate your workforce, and maximize performance.
We work shoulder to shoulder with you, bringing diverse points of view and a deep commitment to your success.
By challenging one another, we achieve breakthroughs because only the best ideas survive. The result? Innovative solutions that meet your needs—informed by the global view and the local understanding of our colleagues around the world.
Together, we broaden your horizon and sharpen your focus.
Transform your toughest challenges into actionable opportunities.
And set your path for sustainable success.
In 2024, businesses prioritized risk management in trade finance and credit insurance, leveraging technology, ESG integration, and innovative tools to navigate economic volatility and global challenges.
United Kingdom
Finance and Banking
To print this article, all you need is to be registered or login on Mondaq.com.
In this insight we take a look at trade finance and credit
insurance risk management strategies in 2024, plus global business
trends and challenges.
2024 was a transformative year for businesses globally, with
developments shaped by a volatile economic landscape, technological
innovation, and shifting geopolitical dynamics. A critical focus
for companies was robust risk management strategies, especially in
trade finance and credit insurance, to ensure resilience amid
uncertainties.
Global business trends and challenges
Economic volatility
Sluggish global growth and inflationary pressures persisted,
with businesses navigating tighter credit conditions and elevated
interest rates. Economic slowdown was ranked as one of the most significant risks
for companies globally.
Digital transformation
The integration of AI and blockchain technology continued to
reshape trade finance processes, enhancing transparency and
efficiency across supply chains.
ESG commitments
Companies faced increasing regulatory scrutiny and investor
demand for sustainable practices, and integrating ESG factors into
their operational and financial strategies.
Risk management strategies in 2024
Businesses leaned on structured approaches to mitigate risks in
trade and credit finance, leveraging the following tools and
strategies:
- Trade credit insurance
- Usage: Widely adopted to safeguard receivables
against non-payment risks, trade credit insurance allowed
businesses to protect cash flow and maintain creditworthiness. This
was particularly valuable during economic turbulence when defaults
were more likely. - Market insights: Trade credit insurance demand
grew as firms sought solutions for managing credit risk amid
geopolitical tensions and supply chain disruptions.
- Usage: Widely adopted to safeguard receivables
- Trade finance innovations
- Digitalization: Blockchain and AI-driven
solutions accelerated decision-making in trade finance, reducing
transaction times and enabling better risk forecasting. - Supply chain finance: Increased reliance on
supply chain financing addressed liquidity gaps for SMEs, with
institutions offering tailored credit products.
- Digitalization: Blockchain and AI-driven
- Enhanced risk analytics
- Reports such as the ICC Trade Register provided critical insights
into credit risk performance, helping financial institutions and
corporates refine underwriting and credit limit strategies. - Data-driven tools allowed better alignment with Basel
regulations and credit risk profiles, supporting a more stable
financial ecosystem.
- Reports such as the ICC Trade Register provided critical insights
Looking forward
As 2025 approaches, the focus remains on leveraging technology,
improving financial inclusivity through trade finance, and
strengthening ESG commitments. Businesses must continue to balance
growth with risk management, employing innovative tools like credit
insurance and digital trade platforms to navigate a complex global
landscape.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
link
