Certainty is at a premium in uncertain times, particularly across the landscape of cross-border B2B commerce.
The volatile tariff landscape has reportedly cost companies over $34 billion in lost sales and higher costs while at the same time throwing supply chains and overseas relationships into disarray. And while the tariffs were blocked by the U.S. Court of International Trade Wednesday (May 28), as of Friday (May 30), that block has yet to be implemented while the ruling is appealed.
It makes for a complicated B2B landscape to navigate for firms reliant on foreign sourcing, making the ability to enable secure, compliant and reliable trade more valuable than ever. Against this backdrop, traditional banks may have a unique opportunity on their hands: the ability to underwrite cross-border risk, provide regulatory guidance and leverage global correspondent networks.
Despite the emergence of alternative finance providers and FinTech challengers when it comes to cross-border B2B trade, traditional banks can still look to leverage their incumbent trust advantage in order to position themselves as indispensable partners in uncertain times.
The only catch? Certain innovations around payment speed, security and flexibility have become table stakes for today’s businesses — and banks will need to meet them where they are.
See more: Trade Finance Automation Looks to Recode Supply Chain Payments
The Importance of Trust in Trade Finance and Cross-Border Commerce
Trade finance is the engine behind global commerce, providing the financial instruments and tools that ensure exporters get paid and importers receive their goods. Letters of credit, guarantees and supply chain financing all serve the same basic function: to reduce risk in transactions that span jurisdictions, legal systems and time zones.
At the core of these instruments is trust — trust that payment will be made, goods will arrive and obligations will be honored. In cross-border transactions, the absence of physical proximity, familiarity or recourse makes trust not a soft factor, but a central prerequisite for deal execution.
In that regard, banks may still be the most recognized and regulated arbiters of trust globally. Financial institutions are deeply integrated into global trade through correspondent banking relationships, compliance regimes and capital adequacy requirements that ensure accountability.
For B2B clients, especially those operating in jurisdictions with fragmented or weak legal systems, the assurance of dealing through a regulated bank can provide key confidences to counterparties around transactions where anti-money laundering (AML), know your customer (KYC) and sanctions screening are mandatory.
Of course, the trade finance ecosystem is not immune to disruption. Over the last decade, FinTech startups and blockchain-based platforms have begun offering alternatives to traditional bank-financed trade. These new players promise faster transaction speeds, increased transparency and lower costs.
When it comes to end-user experience in cross-border payments, the goal posts are moving faster than ever across the traditionally legacy B2B landscape, where embracing innovation can be a bit like docking a cruise ship: a relatively slow affair.
Read also: Currency Matching Innovations Critical as Tariffs Shake Up Cross-Border B2B Trade
Trust Still Requires a Responsible Party
Recognizing both the threat and the opportunity, many banks are investing in digital transformation. Global financial institutions are actively integrating artificial intelligence (AI), machine learning and data analytics into their trade finance operations, and undertaking modernizations such as digitizing onboarding, automating document checks and using predictive analytics to assess risk in real-time.
While technology can validate documents and automate workflows, it struggles to replicate the implicit trust, risk assessment and legal enforceability that banks offer. Separately, the lack of universal standards and regulatory clarity for digital trade finance platforms can limit their scalability. Each jurisdiction may interpret digital documents differently, and legal acceptance of electronic bills of lading or blockchain-based smart contracts remains inconsistent.
Nowhere is the value of trust more evident than in emerging markets, where institutional frameworks are often less developed. In such contexts, foreign buyers and suppliers are especially wary of risks related to fraud, non-payment and contract enforcement.
Banks can play a pivotal role in facilitating trade in these regions by providing instruments that de-risk transactions and extend credit based on standardized assessments. Their presence lends credibility to deals that might otherwise not occur.
Moreover, as developing markets become bigger players in global trade — Africa and Southeast Asia, in particular — the demand for reliable, bank-backed trade finance solutions is expected to grow.
For B2B enterprises navigating the complexities of international trade, trust is not optional. It’s strategic. And for now, banks may still have a strong hand to play.
