Once known for its scale and speed, for years we saw global trade expand smoothly and rapidly; all companies had to do was focus on getting goods from A to B, as quickly and as cheaply as possible.
Today, however, things are wildly different and far more unpredictable. From the COVID-19 pandemic and the 2021 Suez Canal blockage to the more recent Red Sea shipping attacks and escalating US tariffs, global trade has faced shock after shock.
Even this June, when Iran threatened to close the Strait of Hormuz – a vital passage for around 20% of global oil and a quarter of LNG exports – oil prices surged, not from anything concrete that had changed, but just from the fear of what might happen. This example, like many others, shows us all just how fragile global trade routes remain, and how quickly the “scale and speed” model can unravel.
For finance professionals, the knock-on effect is drastic. There are higher costs, tighter margins and strained working capital – as goods are delayed, stockpiled, or rerouted, tying up cash. Volatile currencies and commodities make hedging more complex and expensive, and there’s also a greater counterparty risk, as suppliers and customers face their own liquidity challenges. Accurate forecast planning also proves just as challenging, with supply chain timelines and input costs changing without warning.
Legacy tech is intensifying the pressure
Unfortunately, the above challenges – which are putting enormous pressure on finance teams as they are – are all being magnified simply because so many are still using outdated tools and manual processes that are no longer fit for purpose.
Much of the industry is still running on analogue – paper, spreadsheets and systems that don’t talk to each other. The result? Patchy data, clunky workarounds and blind spots between teams. Risks get spotted too late, freight data can’t be pulled in fast enough to reroute shipments, and stock records don’t match up across locations – leaving companies with too much in one place and not enough in another.
Despite the fact decision-making is slowed, the risk of errors and missed opportunities is increased, and scaling operations efficiently is made very difficult (thanks to a lack of integration between tools), so many are still shying away from more advanced finance tech that can ease much of this chaos.
There are a number of reasons why this is the case, but it’s mainly down to the fact that legacy systems are so deeply embedded in workflows that replacing them can seem disruptive, costly or even risky. However, this resistance to change – particularly in the more volatile trade environment we’re currently in – can be more dangerous than the upgrade itself, leaving teams less able to pivot quickly or tap into real-time insights.
How digitised trade finance platforms can help
Nobody knows where the next big shock to global trade will come from, or how it will hit finance teams. But what’s clear is that the job’s getting harder: politics, currency swings and shifting rules are piling on, and without real-time tools and joined-up data, keeping pace will be near impossible.
Here’s where digitised trade finance platforms come in, offering finance teams the ability to:
- Access real-time visibility: see the true state of cash flow, inventory, and exposure across geographies instantly.
- Accelerate liquidity: unlock working capital faster through automated approvals and integrated funding options.
- Automate workflows: cut manual errors and free up resources for strategic decision-making.
- Integrate critical data streams: connect freight, ERP, and risk data for a unified, live view of operations.
- Pivot at speed: renegotiate payment terms, re-route shipments, or switch suppliers in hours, not weeks.
- Reduce operational risk: spot issues earlier and strengthen supplier and funder relationships.
- Future-proof operations: build the agility to outperform less nimble competitors when the next shock hits.
Getting more organisations on board with a modernised approach to working capital management isn’t just about swapping out old systems – it requires a strong executive buy-in, a clear ROI, and tools that integrate seamlessly with existing systems. But the direction of travel is clear and unavoidable, especially as volatility is fast becoming the norm. And with this in mind, platforms that can improve liquidity, agility, and resilience will soon move from “nice to have” to “can’t operate without.”
The early adopters are already ahead, with reports dating back a number of years showing the vast majority of CFOs (84%) admitted digitisation improves working capital, while more than 9 in 10 reported faster, more efficient transaction processing.
So for me, the only real question now is whether those finance leaders not yet on board make the shift on their own terms, or wait until the next global disruption forces it upon them.
- Risk & Resilience