APIs continue to provide banks with ways to increase efficiency and improve customer experience, lowering the entry barrier for creating new services and introducing new business models. This year’s winners include API-based embedded-finance and open-banking solutions.

AI remains a critical enabler, driving innovation in areas such as chatbots, risk monitoring and detection, algorithms, automation, and internal GenAI customer service assistance.

Banking-app enhancements include budget management, onboarding processes, and the use of telemetry to enhance business management and data utilization.

Digital assets, encompassing a broad spectrum from conventional bonds to instruments backed by unique items like violins, are the rare emerging field that extends beyond the boundaries of traditional finance. Expanded use of digital assets is transforming payment processes. This year’s winners have been active in such areas as tokenization, integration of assets typically financed with bitcoin, and development of crypto-custody services.

Banking innovations are opening doors to expanded opportunities. Hyper-personalized lifestyle banking can now encompass services such as mobile phone access, insurance, mortgages, and even estate-management support. Broader applications of finance, including the linking of operational weather forecasts with commodity prices and improved monitoring of ESG performance, demonstrate how technology is expanding finance’s remit. Innovations addressing financial accessibility, unclaimed benefits solutions, and simplified access to credit underscore how financial inclusion remains a hotbed of innovation. Among our nonbank winners, meanwhile, are firms that support banks in everything from compliance to payments.

Banking innovation is by no means confined to the largest and most mature markets. Indeed, Latin America, Africa, and the Middle East reported the highest number of financial innovations this year, thanks to a focus on meeting unmet needs, the ability to leapfrog legacy systems, a strong mobile-first culture, and a potentially supportive regulatory approach. These regions are likely to remain fertile ground for financial innovation as they strive for greater financial inclusion and leverage technology to address their specific economic and social challenges.

Innovation is proving a process of evolution for all banks, wherever they are located, leaving no margin for complacency if they want to remain competitive. Innovation for innovation’s sake, however, should be avoided as it is only by understanding user needs that banks can adopt and integrate new technologies that deliver innovations to genuinely benefit users and improve the customer experience.

Wells Fargo Estate Care Center

In 2018, Wells Fargo created its Estate Care Center to help families manage estate settlements. But the bank encountered technical difficulties as its various product divisions, including deposit accounts and investment funds, operated on separate computer systems. To address this, Wells Fargo partnered with Pegasystems, a business-process management firm based near Boston. Pegasystems’ Pega technology connected the Estate Care Center with the bank’s other computer systems.

Wells Fargo utilizes Pega for case management, enabling the bank to monitor customer interactions across different products, which relieves bereaved families from having to repeatedly provide information. Pega also allows the bank to be more proactive at contacting customers to promote estate planning and beneficiary updates.

Wells Fargo is now exploring the potential of AI to serve as a knowledge resource for agents, enhancing their ability to provide empathetic estate care services rather than replacing human interaction.

Most Innovative Bank in Middle East| ARAB BANK

Acabes, Arab Bank’s in-house development factory, enabled the bank to launch an updated version of its Reflect banking app in 2024. Reflect benefits from a host of new digital features, including multicurrency subaccounts for deposits, savings, and payments. Customers can also use Salary Transfer and instant transfer features with these currencies. Arabi Shopix, another Acabes product, is an e-commerce website creation service.

Acabes empowered Omnify, Arab Bank’s embedded finance and open-banking platform, toward its official launch, leading to Omnify signing and/or going live with third-party providers. Omnify has solidified its position as the region’s leading one-stop shop for embedded finance and open banking, preparing for the next era of banking as a service. Partnerships with key innovators like MoXey and Menaitech have improved the platform and let partners quickly develop custom financial solutions.

Most Innovative Financial Technology Company in Middle East | GEIDEA

The first payment provider in the Middle East and North Africa region to offer instant merchant onboarding, Geidea enables businesses to start accepting payments within minutes, thanks to substantial investments in automation, AI, and digital verification.

Geidea’s instant onboarding solution is particularly significant due to the rapid growth of digital-payment adoption across the region and the increasing number of microenterprises entering the formal economy. By facilitating quick onboarding for businesses of all sizes, Geidea supports scalable growth.

Furthermore, Geidea has set a new benchmark for innovation by becoming the first fintech in the region to develop and launch its own proprietary point-of-sale terminal. This establishes a new standard for flexibility, security, and technological integration in payments. By eliminating reliance on thirdparty hardware manufacturers, Geidea has disrupted traditional payment solutions and introduced a model that empowers businesses with unprecedented control and customization.

Cash Management Forecasting in ATMs Project | BANK MUSCAT

Oman’s Bank Muscat became the first Middle East bank to leverage AI and machine learning for predictive analytics in cash management, creating an efficient, non-manual ATM cash forecasting and replenishment process. By analyzing historical data for cash withdrawals and deposits along with external factors like seasonality and local events, the new forecasting system ensures optimal cash levels at ATMs, solving the problem of cash outs, which can be an annoyance for customers, and minimizing idle cash in the ATM, which is not ideal for the bank.

Musaed – Elevating Conversational Banking | BOUBYAN BANK

Boubyan Bank’s chatbot, Musaed—”helper” in Arabic—has undergone a series of recent enhancements. One such, Boubyan Playback, provides customers with a personalized “Year in Review” of their interactions with the bank, encouraging high customer engagement. Additionally, Boubyan has become the first bank in Kuwait to offer AI-powered recruitment assistance through Musaed’s Job Interview Service. During Boubyan’s internal job fair, Musaed streamlined the interviewing and hiring process by facilitating over 1,000 CV submissions and aiding HR in efficiently identifying potential candidates.

AI-powered Reconciliation Platform | BANQUE SAUDI FRANSI

In February, BSF partnered with Deben, a Saudi SaaS platform that automates cash flow management and generates instant reports for financial managers, to launch an innovative AI-powered reconciliation platform. As the first of its kind in both the kingdom and the region, the platform uses AI to deliver intelligent reconciliation, forecasting, anomaly detection, and real-time financial insights. Businesses can customize transaction categorization to meet their specific needs and automation streamlines processes for increased efficiency, cost savings, and an enhanced user experience.

FABeAccess Electronic Direct Debit (eDDS) API Suite| FIRST ABU DHABI BANK (FAB)

FAB’s eDDS API Suite is transforming the way businesses manage their receivables. The solution offers real-time, secure, automated collection processes while ensuring regulatory compliance. eDDS API Suite streamlines collections for billers and enhances convenience for payers through features including mandate registration, cancellation, collection requests, realtime status updates, and pre-collection reports. By eliminating manual processes and reducing administrative costs, businesses gain end-to-end visibility over their receivables. As the first API-driven electronic direct debit solution in the United Arab Emirates, eDDS API provides scalability, seamless integration with ERP systems, and a customer-centric approach.

PULSE Mobile App| MASHREQ

PULSE Mobile, a pioneering corporate banking app in the Middle East, provides relationship managers with a comprehensive, 360-degree view of client information. The innovative tool enables instant access to critical client data, transaction approvals, and call report submissions, directly from mobile devices. Additionally, the app’s news alerts feature ensures that relationship managers stay informed of key industry events, enabling them to proactively manage their portfolios and respond to market changes in real time.

QIC App| QATAR INSURANCE CO.

he QIC App is Qatar’s premier comprehensive mobile platform, delivering an array of services tailored for motorists and vehicle proprietors over a platform set up to streamline their daily routines and enhance road safety. By integrating both insurance and auxiliary non-insurance offerings, the QIC App addresses a critical issue: the disjointed and protracted procedures associated with overseeing diverse automotive requirements. Concurrently, QIC Reads operates as Qatar’s exclusive digital repository dedicated to insurance education, aiming to foster a robust culture of insurance awareness and simplify the understanding of everyday insurance needs in Qatar.

Fawran Corporate| QATAR ISLAMIC BANK

Qatar’s first Sharia-compliant, real-time corporate payment service, Fawran Corporate launched last November. The service allows instant transactions, including payroll, supplier payments, and intercompany transfers, improving liquidity and streamlining operations. Adherence to Sharia principles fosters trust and expands the service’s reach within the Islamic finance sector. Fawran Corporate marks a major milestone in Qatar’s financial development, promoting innovation, efficiency, and inclusivity.

RAK Telemetry (Real Time Dashboard)| RAKBANK

RAK Telemetry, a groundbreaking suite of 32 real-time and near real-time dashboards, offers a centralized platform to track and monitor essential business processes, integrating key data points and metrics to provide a comprehensive overview of onboarding journeys, service requests, transactions, and IT tickets status. By eliminating the need for multiple, disjointed tracking systems and manual data correlation, RAK Telemetry streamlines operations, enhances decision-making, and boosts overall efficiency. Businesses can leverage the tool to gain valuable insights into customer behavior, market trends, and operational performance, enabling them to respond swiftly to changing conditions and optimize their strategies.

Most Innovative Bank in North America | BANK OF AMERICA

Bank of America’s (BofA’s) dedication to improving customer experience is evident in the 12% increase in digital interactions by clients last year, reaching a recordbreaking 26 billion interactions. Corporate clients made over $1 trillion in payment approvals on the bank’s CashPro app in 2024—a 25% increase year on year.

Notable CashPro Data Intelligence innovations include CashPro Search with Investigations—the first comprehensive search-and-investigation tool across transaction types. Another innovation is CashPro Capital Markets Insights, which is the first integrated capital markets experience available in a treasury mobile app, offering access to investment-grade secondary bond pricing alongside treasury information.

The bank also launched Virtual Payables Direct, an innovative solution that combines BofA’s card-issuance, merchant-acquisition, and payment capabilities. For the first time, buyers can benefit from the working capital advantages of a card transaction while paying suppliers who prefer direct bank transfers: Payments begin as card transactions but are delivered to suppliers as bank transfers, ensuring that suppliers get paid quickly while buyers benefit from extended payment terms.

Most Innovative Financial Technology Company in North America | BATTERY FINANCE

In November 2024, Battery Finance executed a pioneering financial transaction by establishing a bitcoin reserve with shared appreciation benefits for both borrower and lender. This innovative approach was integrated into the collateral package for the refinancing of Project Bank Street Court, a seasoned multifamily mixed-use asset located in Center City, Philadelphia.

This groundbreaking transaction effectively enabled borrowers to leverage Bitcoin as collateral for loans. The structure of the deal was unique in its dual-collateralized nature—by combining Bitcoin with traditionally financeable assets, Battery Finance offered borrowers uncorrelated downside protection and enhanced the overall collateral package. This novel approach to collateralization mitigated risks associated with the volatility of Bitcoin while still allowing borrowers to capitalize on its potential for appreciation. 

Lumi Assistant | BMO

BMO uses an employee-assisting Gen AI solution, incorporating Amazon Web Services and Anthropic’s large language model, to read, interpret, and summarize complex documents including policies, procedures, operating manuals, and regulatory documents in a user-friendly format. Launched in March to support 200 employees, Lumi Assistant was expanded in April to support some 8,500 Canadian front-line bank employees. By the end of this year, BMO plans to make the solution available to over 14,600 Canadian personal and business banking employees.

Virtual Account Based Solutions (VABS) | BNY

In January, BNY launched VABS, a cash management solution that promises to provide clients with improved control and access to cash administration activities and reporting capabilities. VABS is one of the first cash management systems to offer instant access to robust, real-time transaction and balance reporting at the individual virtual account level and ACH allocations at the virtual account level. Virtual accounts can be linked to physical accounts within BNY and payments are reflected in real time.

Tokenization of the 1708 Stradivarius Violin, “Empress Caterina” | GALAXY DIGITAL

Galaxy Digital’s groundbreaking tokenization of the 1708 Stradivarius violin “Empress Caterina” last year established a new paradigm for high-value collectibles in the digital financial landscape. By enabling on-chain ownership tracking, the NFT ensures an immutable record while unlocking the potential for decentralized finance backed by real-world assets.

Asset Tokenization Studio| HEDERA

Hedera’s Asset Tokenization Studio, launched last September, is an open-source toolkit that streamlines the tokenization of bonds and equities. By integrating ownership records, compliance features, document management, and notifications directly on-ledger, it eliminates the need for off-chain data management, thereby reducing operational risk. The end-to-end solution improves upon the ERC-1400 standard, enabling full lifecycle management of tokenized assets.

TPRM Accounting Fintech, aka Sustainability Accounting Fintech (SAF)| LELE-HCM

SAF uses AI to enhance financial analysis and risk management via two platforms: Fintech V1 and Fintech V2. V1 generates reports for banks and third parties, helping to calculate risk-weighted assets. V2 allows for continuous monitoring and control, facilitating on-balance-sheet netting. Basel III regulations have shifted focus from the internal ratings-based approach to standardized methods for recognizing credit risk mitigation, a shift supported by SAF’s platforms.

Zenus Embedded Banking| ZENUS BANK

Last November, the Puerto Rico-based digital bank launched a first-of-its-kind, fully embedded banking platform. The API-driven solution enables other financial institutions around the world to set up dedicated US dollar accounts, process international payments, and offer cross-border Visa card issuance.

Most Innovative Bank in Western Europe | SOCIETE GENERALE

Societe Generale’s Global Transaction and Payment Services division has launched several new innovations to reduce their corporate clients’ workload. These include IKAR, a Gen AI chatbot for cash management product-documentation inquiries; and the Digitrade Tool, which uses advanced data analytics, including algorithms and pattern recognition, to personalize the document-checking process. The Digitrade Tool identifies and extracts key information from documents, adapting to the specific requirements of different transactions. By eliminating the need for paper checks and offering digital tools with multiple features, the tool provides users with a more convenient and tailored experience, aligning with their preferences for efficiency and accuracy.

Additionally, the bank’s X-Border API enables other banks to automatically send payment instructions to Societe Generale in 40 different currencies from a single account, benefiting from a guaranteed rate for 20 minutes after obtaining the quotation.

Most Innovative Financial Technology Company in Western Europe | REDCOMPASS LABS

AnalystAccelerator.ai is the world’s first multiagent AI solution engineered specifically to accelerate payments transformation. Developed by RedCompass Labs and launched in November 2024, this innovative tool leverages the extensive knowledge and experience gained from over 300 payment projects undertaken for leading global banks. It also utilizes the most comprehensive library of global payments documentation available.

Using AnalystAccelerator.ai, a business analyst can reduce manual work on a typical payment modernization project by up to 68%. Regulatory and project documentation updates that used to take weeks can be completed in under a day, saving banks millions of dollars and months of work. This leads to improved project outcomes and enhanced compliance with regulatory requirements.

In April this year, RedCompass Labs unveiled AnalystAccelerator.ai v2.5, an enhanced version fine-tuned on the largest collection of payments rulebooks in the world and outperforming leading general AI models. It delivers 13% better performance on complex payment-related tasks than GPT-4o and achieves a perplexity score 10 times lower than open-source AI models.

ADA (Analytics + Data + AI) Platform | BBVA

BBVA ADA, the first global data platform to fully integrate all countries in which the BBVA group has a presence, launched last November in Europe and Uruguay. The platform streamlines the end-to-end analytics process, utilizing 100% of the bank’s data and Amazon Web Services’ advanced managed services to optimize data processing, machine learning, and analytics. The combination improves the strategic capabilities and decision-making expertise of data scientists, analysts, and reporting teams throughout the organization.

New Signature for Operations in CaixaBank Group Applications | CAIXABANK

By consolidating the signing process on a single platform, CaixaBank has effectively eliminated the need for its customers to navigate multiple applications or interfaces to complete their banking tasks. The streamlined approach not only saves time but reduces the potential for error and enhances the overall user experience. The new authorization method incorporates advanced security measures to safeguard customers’ sensitive information and financial assets, ensuring they can conduct their banking activities knowing their transactions are protected by robust security protocols.

Mind Money Weather Model | MIND MONEY (FORMERLY ZERICH)

Mind Money Weather is the first quantitative model to connect operational weather forecasts and commodity prices. Typically, factoring weather data into trading strategies involves detecting significant patterns and combining these with meteorologists’ informal impact assessments, considering the economic context (demand, supply, stocks) but without a clear mathematical model. Instead of focusing on forecasting, Mind Money Weather centers on the formal, quantitative assessment of how weather affects commodity pricing.

Manish Kohli: HSBC is a major player in the open-banking and open-finance ecosystem. We’re the world’s largest transaction bank and have a global footprint that spans the numerous jurisdictions and clearing systems that are driving the open-banking agenda.

We are reengineering our processes by integrating advanced digital solutions, from automated cash management to robust API connectivity. So we automate manual processes and integrate systems to improve efficiency and risk management.

Collaboration is key, because we see open banking as a catalyst for a more client-centric ecosystem. This collaboration starts with our clients as they help shape our product-development road map.

We also collaborate across clients’ treasury tech stacks and have live API integrations with partners such as SAP, Oracle, Kyriba, and FIS. This ensures we are providing clients with an end-to-end solution and staying focused on incorporating technology into payment solutions that support our clients and their treasurers with the real-time information they need to make more-informed cash management decisions.

GF: What is HSBC’s strategy for incorporating emerging payment technologies such as digital currencies—including central bank digital currencies (CBDCs)—andhow do you see these impacting your payment solutions?

Kohli: Whilst CBDC maturity varies greatly by market, it will play a critical role in the payments solutions of tomorrow, which is why we continue to research, test, and invest with various central banks globally.

Currently, HSBC is involved in pilot projects with central banks in markets including the UK, France, Singapore, Hong Kong, China, Thailand, and the United Arab Emirates, and with the Bank for International Settlements’ Project Agorà. 

Our tokenization platform for digital bond issuance, Project Orion, has led the way in the digitalization of capital markets infrastructure. HSBC was also one of the first financial institutions to complete proof-of-concept use cases within the Project Ensemble Sandbox, the Hong Kong Monetary Authority’s CBDC project to accelerate tokenization.

GF: How is HSBC utilizing data analytics to gain deeper insights into customer behavior within digital channels? And how are you using these insights to drive innovation in client service?

Kohli: We process numerous transactions per second, generating a wealth of data. This data is used not only for retrospective analysis but also in real time, powering intelligent payments solutions. The insights gathered from millions of transactions help us to not only improve our own processes but deliver tailored, actionable advice to our clients ranging from choosing the fastest or cheapest route for international payments to risk-mitigated strategies for currency management.

Our innovative analytics tools can detect when a payment is made in an alternative currency. This allows us to offer customers the option to secure the best rate. The use of AI and API integration further ensures that insights derived from data immediately support payment decisions.

We’ve established a dedicated Treasury Solutions Group, which conducts gap analyses and recommends best practices to improve treasury operations.

GF: Beyond incremental improvements to existing digital channels, what “moon shot” or disruptive digital banking or payment solutions is HSBC investing in?

Kohli: We don’t underestimate the importance of incremental improvement, given that we operate in a heavily regulated, market-driven ecosystem that spans numerous regulators, central banks, and payments partners.

We are focused on building innovative solutions that enable our clients to transform in the digital economy. In recent years, we’ve made significant investments to develop digital solutions that help accelerate the pace at which money moves globally. Our most recent innovative solution, Digital Merchant Services, has enabled HSBC to become a digital-merchant acquirer for cards, local e-wallets, and real-time payments, helping our merchant clients with seamless payment collections at scale and to grow their business efficiently.

We’ve invested $30 million in building a next-generation liquidity engine, and our use of AI allows us to provide real-time, data-driven insights during transactions. For example, through FX Prompt, our systems can instantly advise customers on the best currency option, ensuring they secure the most favorable rates, making our payment solutions smarter and more agile. Tomorrow’s moon shots will be the result of ongoing collaboration with numerous stakeholders in the ecosystem, persistent investment, and continuous R&D.

The EU has also been very active in its antitrust scrutiny of Google and Meta, issuing substantial fines. In November 2024, the EU fined Meta for linking its online classified ads service Facebook Marketplace to its social network, which was deemed an unfair advantage. More recently, Meta was fined for breaching the Digital Markets Act regarding its “pay or consent” model for ad-free access to Facebook and Instagram, as the EU argued it does not provide users with a genuine free choice about their data.

The approaches taken by the US and EU in challenging Google and Meta’s monopolies differ. The EU has adopted a broader and more interventionist approach, exemplified by its history of antitrust scrutiny against Google and its willingness to issue hefty fines. In contrast, the US has historically focused more narrowly on demonstrable consumer harm and has been more hesitant to pursue structural remedies like breakups.

However, increasing scrutiny suggests a potential shift towards a more assertive stance. But President Trump’s recent firing of two FTC commissioners in March could indicate efforts to curb this increasing scrutiny. These divergent paths reflect differences in legal frameworks, regulatory cultures, specific market concerns, and political priorities.

While unprecedented in their scale—and currently on pause—Trump’s actions did not come out of nowhere. Reshoring has been a trend since the early 2000s. The decline of industrial manufacturing in both the US and Europe fuelled opposition to trade liberalization, resulting in rising duties and the decision by many companies to relocate production facilities back to their home or neighboring countries. The new protectionism will not halt global commerce, but globalization in its current form “may have now run its course,” HSBC Chairman Mark Tucker suggested at the bank’s recent global investment summit. It also reinforces the shift toward regional supply chains and resilient manufacturing locations.

Banks play a critical role in the $9.7 trillion trade finance ecosystem and their expertise will be crucial in helping companies navigate market fluctuations and an uncertain trade finance landscape.

“Given the success of banks’ trade finance divisions over the past few quarters, several banks increased their budgets for this year,” notes Frank Tezzi, vice president and head of Trade & Supply Chain at CGI. “However, many banks waited on spending their budgets until after the election. In the new year, we have seen a commitment to continue with this increased expenditure, particularly given the unique role trade banks can play supporting their customers in a rapidly changing geopolitical climate.” BNP Paribas’s slogan, “the bank for a changing world,” helps explain why its global head of Trade Solutions, Jean-François Denis, is sanguine about current developments.

“Banks are always confronted with changing situations,” he says, “whether it’s geopolitics, major events, or ESG topics. But I think for all business and trade finance in particular, our job is to accompany our clients in terms of mitigating their risks. We accompany our clients that are redirecting their flows. Whether it’s nearshoring or diversifying, a lot of things can be de-risked.” ING views trade finance as one of its pillars of growth and is looking to continue to invest in its trade products, people, and systems in the countries where it operates. In line with that strategy, it continues to support clients executing a sustainability transition with green- and sustainability-linked trade solutions.

“We see growth potential in various sectors like energy, where we see an increased demand from clients in trade, supply chain, and receivable finance solutions,” says Ronald Supheert, managing director-Global Lead Trade Finance Services at ING. Last year, ING’s trade unit exceeded €2 billion in volume mobilized to support clients making green or sustainable transitions.

Looming trade wars and the implementation of higher tariffs will have the greatest impact on clients that have large trade volumes with the US, Supheert expects, but he also has faith in their ability to meet their growth targets through other solutions and in other markets.

Thanks to recent supply chain disruptors like the Covid-19 pandemic and the Russia-Ukraine war, banks have already intensified their focus on working capital optimization solutions that help clients secure supplies efficiently, says Eva Rubio Garcia, head of global transaction banking at BBVA.

“There’s an emphasis on being prepared for client treasury needs, particularly regarding instant payments and data,” she says. “Following a period of survival during Covid, companies are now investing in efficiency, rethinking financial flows, and optimizing the cash conversion cycle.”

The evolving tariff landscape poses a real operational and financial risk, and finance teams will need better visibility, faster decision-making, and stronger scenario planning if they want to adapt. Trade wars require agility and a better grasp of trade finance programs that can free up working capital. Working capital solutions such as supply chain finance (SCF), dynamic discounting, and receivables finance can help counter the effect of tariffs on the cost of capital.

Tariffs cause instability, threatening supply chains and business continuity. SCF mitigates the adverse effects of disruptive events by unlocking working capital trapped in the supply chain. Orbian, one of the first companies to develop an SCF solution, offers a bank-agnostic model that is reflected in recent offerings including Express SCF, Fixed Rate discounting and Flex Pay, a Payment with Terms solution.

The biggest trend of the last two years, says Orbian Managing Director Markus Schiffers, is Payment with Terms, which enables working capital optimization without requiring procurement to negotiate payment terms with suppliers. Payment with Terms allows providers to pay suppliers on the scheduled date while directly protecting the buyer’s liquidity by extending their payment obligations. It allows buyers to manage their cash outflow more predictably, as they have a set schedule for payments to Orbian. This predictability helps with cash flow forecasting and overall financial planning. This safeguards the buyer’s cash flow and enhances working capital, all without requiring supplier participation.

“You need a solution that is very fast in improving working capital for buyers,” says Schiffers. “To roll out supply chain finance to improve working capital takes 18 months or longer; Flex Pay is effective within two months. The combination of both solutions in one program achieves fastest working capital improvement at lowest cost to buyers.”

Moving fast is not always possible in real-life supply chains, however, as it takes time to establish new factories, a complex process that entails high costs, numerous operational challenges, and potential regulatory and compliance issues. Many companies that have adopted a “China Plus One” strategy, diversifying their supply chains by establishing production hubs outside of China, will be holding off from further relocation decisions until after the dust settles.

While China faces the highest tariffs at 145%, other Asian economies heavily dependent on exports to the US are also significantly impacted. Vietnam’s garment industry faces a 46% duty and Bangladesh’s textile sector a 37% tariff. African nations with strong US exports are also feeling the pain, with the most punitive duties levelled at Lesotho (50%), Madagascar (47%), South Africa (30%), and Côte d’Ivoire (21%).

Countries on the receiving end are scrambling for ways to present a united front. The Trump tariffs have led to the first economic talks in five years between South Korea, China, and Japan, with the goal of making regional trade easier, and they appear likely to increase trade among countries in the Global South.

Between 2007 and 2023, South-South trade more than doubled from $2.3 trillion to $5.6 trillion. Daniel Soloway, head of Trade & Working Capital, Europe & Americas and global head of Distributor Finance at Standard Chartered, believes geopolitical uncertainties and a destabilized tariff landscape will cement the importance of new trade hubs.

“The World Trade Organization expects global trade to rise by about 3% in 2025,” he notes. “A lot of that is driven by intra-emerging market trade, by which I mean Global South to Global South trade. We believe China, India, and ASEAN will continue to be the largest contributors for global growth over the next decade.”

Standard Chartered is hoping to facilitate the shift. “We have strong and extensive teams on the ground in Dubai, China and in Singapore,” says Soloway, “so we’re capturing new opportunities in those intra-Asia trades in ASEAN and Middle East network corridors.”

“While we believe that tariffs will affect growth in certain corridors, we believe it will be offset by growth in other corridors that we can capture.”

Daniel Soloway, Head of Trade & Working Capital, Standard Chartered

Asia is home to 18 of the 20 fastest-growing corridors and 13 of the 20 largest, according to the McKinsey Global Institute. With a presence in many of those markets, Soloway says, Standard Chartered is well positioned to capitalize on changing trade flows. From a logistics perspective, planning will be key. Aside from near-shoring and diversified supply chains, logistics networks need to be flexible enough to adapt to new customs barriers and margins sufficient to absorb extra costs.

“Unexpected consequences in logistics are affecting business operations,” warns Jukka Kuusala, head of Trade Finance at Danske Bank. “Tariff adjustments have become complex. What was once a single tariff for machinery now varies for components, such as aluminum and stainless steel parts. This complexity is causing logistics problems as customs authorities struggle to manage imports and exports efficiently, leading to shipment delays.”

Increasingly, export/ import companies in Europe are requesting additional security for US transactions, Kuusala notes. “While European companies typically use bank guarantees to secure contractual obligations, US companies prefer standby letters of credit. This difference has led to increased demand for advisory services as companies navigate these requirements.”

Companies will need to remain adaptable to uncertainties and search out trade finance solutions to help them manage balance sheet pressures and working capital. Currency mismatches are also a threat; Standard Chartered offers a digital foreign exchange solution, SC PrismFX, to address these issues.

Clients are seeking guidance on navigating current uncertainty, potential tariffs, and geopolitical issues, Soloway notes. They are also concerned with maintaining margins and price elasticity and managing working capital metrics.Clients are seeking guidance on navigating current uncertainty, potential tariffs, and geopolitical issues, Soloway notes. They are also concerned with maintaining margins and price elasticity and managing working capital metrics.

In addition to its Treasury Leadership Forums, which bring together corporate treasurers with Standard Chartered’s in-house experts, the Standard Chartered Trade Institute, launched in 2024 and accredited by the London Institute of Banking & Finance, offers training programs to support clients through these changes.

Useful tools include trade finance platforms that centralize and digitize trade finance operations, allowing companies and their banks to efficiently manage instruments like letters of credit, guarantees, and collections. APIs enable seamless integration between different systems, such as the bank’s core banking system, the client’s ERP system, and third-party services. AI and machine learning are now being used for document processing, risk assessment, and compliance: automating and forecasting, among other functions.

AI is emerging as a critical tool for streamlining tariff classification, duty calculation, and customs documentation, notes Michelle Bonat, chief AI officer at AI Squared, along with monitoring trade regulations, providing personalized alerts, and powering chatbots for tariff inquiries.

“Banks can integrate AI into financial planning tools, helping businesses to run what-if simulations on how tariff changes (e.g., Brexit, US-China tariffs) might affect costs or supply chains,” says Bonat. “AI can suggest alternate supply chain routes or sourcing options based on tariff structures, usually achieved through the use of predictive analytics, optimization algorithms, and AI-based simulation models.”

The global trade environment is changing, and businesses must adapt. But the plethora of new tools and solutions suggests that by embracing innovation, seeking expert guidance, and proactively managing risks, they can still find ways to thrive.

Traditional trade finance is often slow, complex, and difficult to access, leaving many small and midsize enterprises (SMEs) struggling to secure funding. EF offers a potential multibillion-dollar opportunity to streamline transactions and empower businesses. By integrating financial services into nonfinancial platforms, EF allows companies to access financing options like invoice factoring or supply chain finance at the point of transaction.

The shift in how goods and services are bought and paid for is driven by e-commerce growth and infrastructure governed by application programming interface (API) rules and protocols. APIs, blockchain, and artificial intelligence (AI) are the core technologies behind EF. APIs allow real-time data sharing and quick credit approvals, blockchain ensures transaction security, and AI automates risk assessment for faster funding. AI also increases access to financing for SMEs, whether via the integration of EF into e-commerce platforms or the provision of business-to-business (B2B) buy now, pay later services.

To help remedy cash shortfalls at startups, Shopify Balance provides an alternative to traditional business banking, providing merchants with next-day payouts, while Shopify Capital loans provide faster funding for eligible merchants, regardless of size and financial maturity.

Shopify is not EF’s only new kid on the block. In November 2023, FreshBooks, which provides cloud-based accounting software for small businesses, partnered with YouLend to launch a flexible financing solution for more than 100,000 customers across the US.

These platforms are well positioned for EF because they control the customer journey, accumulate rich data on transaction history, and can integrate financial services seamlessly.

The EF shift in e-commerce is not happening in isolation; traditional financial institutions also recognize the opportunity, driving collaboration between banks and fintechs as they realize they can achieve more together.

Last October, HSBC launched a jointly owned venture, Semfi, in partnership with Tradeshift, a B2B global network, to deliver seamless EF solutions to businesses on e-commerce platforms. Semfi embeds HSBC’s payment and trade solutions across Tradeshift’s B2B network, enabling SME suppliers to access faster and more-transparent digital invoice financing from HSBC via e-commerce platforms.

Some banks are building their own banking-as-a-service (BaaS) platforms. Standard Chartered’s BaaS platform nexus, which allows e-commerce partners to offer their customers EF propositions, led to the launch of the Audax platform, which embeds the technology stack in other financial institutions.

BNY’s Trade Network Access Service (TNAS) aims to simplify trade finance for other banks. Instead of managing complex systems for international transactions all by themselves, banks can connect to a global network via TNAS, reducing costs and expanding their reach. This plug-and-play approach makes it easier for smaller banks to offer sophisticated trade finance services, ultimately benefiting their customers.

“By utilizing value-added risk mitigation and financing services,” says Joon Kim, global head of Trade Finance, Working Capital, and Portfolio Management at BNY Treasury Services, “adopters of TNAS can enhance trade revenue by having access to over 4,000 [relationship-management applications] across the globe. TNAS offers distinctive value in a buy-versus-build solution in an area where a financial institution’s need may not be consistent day-to-day.”

While not a new concept in trade finance, EF’s impact could be felt all along the transactional chain, from large to small financial institutions to their customers, Kim argues.

“From a growth perspective,” he says, “if you consider the limitations of a smaller regional or community bank trying to reach networks that provide international access for an importer or exporter, such access could lead to direct growth from providing everything spanning foundational access to more end-to-end needs.” Efficiency and client service improve when trade finance is a one-stop shop with frictionless delivery of services ranging from letters of credit to trade distribution.

“Innovation via digitalization and collaboration has been moving the industry forward and will only continue as more parties make the move away from manual processes,” Kim predicts. 

Singapore-based fintech Xalts, which trains AI agents in multiple trade finance tasks including documentary credit, guarantees, and collections, bought the digital trade platform Contour Network early last year to streamline digital connectivity between banks and corporates. Xalts first examines every problem with an agent, then delves deep to introduce a fully vertical solution for finance teams.

“Due to our integrations with leading banks globally and our expertise in trade finance, we are the only company which is building vertical AI agents to solve operational challenges in trade finance,” says Xalts CEO Ashutosh Goel.

“The biggest barrier to trade finance digitalization, and hence offering embedded trade finance solutions, has been the manual nature of trade finance processes,” he adds. “With our AI agents and now the added capabilities [from Contour] of sending trade transactions to banks, we are solving the operational challenges that come with embedding trade finance solutions.”

The Xalts platform integrates with enterprise resource planning software, accounting systems, logistics partners, and banks, while its AI agents use large-language models to reduce integration times and costs for any platform. The agents consume data in a format-agnostic manner and process outcomes as per the organization’s preexisting policies.

“This allows organizations to introduce new solutions,” continues Goel, “including embedded trade finance, seamlessly as operational processing is simplified, because agents can deal with end-to-end flow in any transaction: including sending transactions to banks.”

Online marketplaces have led when it comes to EF as they seek to integrate financial services into their ecosystems. Increasing customer satisfaction and loyalty also creates monetization opportunities.

Amazon and Alibaba each offer trade finance, for example. Amazon makes working capital loans to Amazon sellers via its Amazon Lending program and other loan options, including daily advances, merchant cash advances, and invoice finance.

Alibaba has partnered with lenders, credit-rating agencies, and banks to provide trade finance. It also extends payment terms up to 60 days for SMEs. Similarly, PayPal Working Capital offers cash advances of $1,000 to $200,000 to first-time applicants—and up to $300,000 to subsequent applicants—based on their PayPal sales volume and account history.

Further digitalization and standardized trade documentation, coupled with SWIFT-powered interoperability studies, promise to unlock EF’s potential even further as more offerings emerge.

Chinese EV maker BYD has surged ahead of Tesla, reporting $107 billion in 2024 revenue compared with Tesla’s $97.7 billion. BYD’s net income in the fourth quarter was a record $2.07 billion, an increase of 73% year-on-year and up 29% quarter-on-quarter.

Tesla’s Chinese rival is gaining global momentum, says Jacob Falkencrone, global head of investment strategy at Saxo Bank, with record-breaking earnings, rapid international expansion, and stock performance that’s outpacing the industry leader.

Innovation is driving BYD’s success, according to Falkencrone, from ultra-fast five-minute charging for 400 km of range to a diversified vehicle lineup that includes hybrids and cleantech solutions beyond cars. The five-minute charge bests the 15 minutes offered by Tesla’s supercharger system.

“This isn’t an incremental improvement,” says Falkencrone. “It’s revolutionary, directly addressing one of consumers’ biggest barriers to EV adoption: lengthy charging times.”

Once reliant on price-cutting, BYD’s pivot toward innovation and technological improvement comes as Tesla’s aging and expensive vehicle models are finding it hard to compete. Founder Elon Musk’s polarizing behavior as a Trump administration adviser hasn’t helped, prompting boycotts against Tesla in Europe and the US.

Looking ahead, Tesla is rumored to be releasing new models this year, including affordable ones, which might rejuvenate sales. But details are scant and the pipeline is small. Nobody is writing off Tesla, however, and the company’s long-time leading role in EV innovation should not be underestimated.

In its favor, BYD has announced it will equip all vehicles with free self-driving technology. The company also makes its own chips and batteries, helping to cut manufacturing costs.

That ambitious agenda won’t be easy to fulfil. Risks include price competition, regulatory hurdles, and the threat of ever higher tariffs from both Europe and the US. Upcoming plants in Hungary and Turkey will help BYD avoid European tariffs and President Trump once voiced his support for Chinese EV makers setting up plants in the US. But for now, geopolitical risks pose a serious challenge as tariffs have kept BYD from entering the passenger car market in the US and regulatory scrutiny around Chinese EV subsidies could complicate its expansion efforts in Europe.