Traditional trade finance is a priority for global banks this year and more than four in 10 aim to develop their supply chain finance (SCF) operations, but fewer show enthusiasm for digitising their trade business, reports the International Chamber of Commerce (ICC).

The ICC’s recently published 2018 ‘Global Trade: Securing Future Growth report includes survey responses from 251 global banks, with 8% of the respondents representing 90% of the world’s trade finance value.

According to the ICC, more than 60% of banks report progress in their digitisation efforts, but only 9% said efficiency has improved as a result of adopting new technology, while only 12% have successfully implemented technology to improve their trade finance processes.

The ICC describes the findings as a “reality check” with nearly one in three banks admitting they are still two years away from implementing trade finance technologies, while 7% admitted digitisation isn’t even part of their current business plans.

Nearly two in three banks have taken measures to reduce their reliance on physical paper in the issuance/advising and settlement/financing processes in their trade operations, but more than half said paper hasn’t been removed in their document verification process.

The top goal for trade finance banks in the next 12 months is to focus on traditional trade finance, with 72% of survey participants selecting that option and 42% stating that SCF is a priority. Over the next three to five years, banks said they plan to focus more on the attraction of non-bank capital to augment trade financing, focus on emerging technologies like blockchain, and adjust their geographic coverage of trade financing products and services.

By contrast less than 30% see digital trade or emerging technology development as a key priority in the next 12 months. Asked whether digital schemes might become a top goal within the next three to five years, less than half expected it to become a priority.

Much of the impetus for banks to update their trade finance processes comes from client demand. Last month, US food and agriculture conglomerate Cargill partnered with HSBC and ING to execute a soybean shipment transaction, from Argentina to Malaysia. Using blockchain to validate trade documentation, Cargill reduced the document exchange time – typically between five and 10 days – to just 24 hours.