- Has Covid19 changed the way in which exporters engage with specialist third party trade finance advisors?
Yes, as in the entire financial sector, Covid also had an important impact in the way in which the consultants interacted with exporters. First of all, the market has suffered a sharp slowdown towards many foreign countries and in general the demand for advice on trade finance services has dropped significantly. Covid has changed the method of contact with exporters but the types of requests and products requested have not changed substantially.
2. Do you find that your clients are altering their payment terms and/ or asking for additional funding support as a result of the crisis?
I don’t think exporters have changed their payment terms following the crisis. Before the crisis, there was already strong competition and exporters were equipped to offer medium-term financial proposals that accompanied their offers. Following the crisis, negotiations have been reduced but strong competition remains in the market which requires structured and very often medium-term financial offers.
3. Do you see a shift in the kind of institutions providing trade finance for exporters and if so, why?
With reference to the Italian market, which is the one we know best, a merger of banks continues, a process that has already begun a few years ago and is continuing even now. This will lead exporters to reduce the number of banks they work with without increasing supply and services. The result is that these new banks are all focusing on the medium-sized enterprise while neglecting SMEs. In the area of local factoring, new companies have emerged revitalizing and making this market very competitive. In Switzerland, the market has already consolidated a few years ago and we have not seen significant changes in the field of trade finance.
4. How is Fintech supporting the diversification of the working capital funding pool?
We believe that up until now Fintech has not been particularly successful and is not yet considered a significant alternative in the field of trade finance or as a means of obtaining working capital. There is certainly a lot of interest from corporates to approach and understand the Fintech world but when it is time to decide they opt for other solutions for various reasons.
Companies now believe that they can find the same solutions outside the FINTECH world by dialoguing with their counterparts.
