The trade revolution: globalised, digitalised trade and finance.
We spoke to Ben Singh-Jarrold, Corporate Banking Strategist at Misys on the trade revolution.
Whether you believe Globalisation 2.0 is an unstoppable force, or that progress to a truly global economy is severely overstated, it is clear that we face an unprecedented time and set of conditions in the history of world trade. As negotiating power has shifted east, new trade finance models are evolving. Pressures in financial markets, combined with regulatory constraints and a lack of risk transparency and agility, have made it difficult for all but the largest players to trade freely.
Global trade blocs are fragmenting. Regional trading relationships are on the rise. Uncertainty in the global political landscape poses unexpected challenges to trade agreements.
On the flipside, changing corporate conscience and a trend towards more ethical consumerism within the rising middle-class of emerging economies is supporting an increasing focus on sustainable trade and finance. We are seeing initiatives filtering down from the G20 through the Financial Stability Board and others.
Across these seemingly unconnected dynamics sits a common theme – digitalisation. Data has become the new currency and the new collateral; the crux of competition and decision making. A new wave of digital innovation has seen the emergence and deployment of ‘post-digital’ technologies which will revolutionise trade, deliver smarter insight and facilitate fast transactions and intuitive financial services. In fact, Gartner predicts that by 2020 more than 25 billion ‘smart’ objects will somehow be connected and that the industrial Internet of Everything will create an economic opportunity in excess of USD 14 trillion.
While the world still lacks the consensus or standards for global sustainability required to eliminate poverty, inequality, injustice and climate change, there is an opportunity to leverage these new dynamics. They open the path to inject fresh impetus for harmonised trade policy and harness digitalisation of the trade finance business.
In June 2016, the World Trade Symposium – inspired by Misys and co-developed with the Financial Times – was launched to do exactly this; to identify the weak links in global trade, finance, policy and technology and create a forum for policy makers, trade bodies, NGOs, financiers, corporates and technologists to come together.
With a bold mission to improve people’s lives by connecting trade, finance and technology, this initiative focuses on three key objectives:
Increasing SME inclusion in global trade
Identifying and promoting sustainable trade to enable long-term growth and prosperity
To facilitate the next waves of digitalisation and globalisation to enable more inclusive trade and value distribution.