How can I offer trade finance services

Trade finance is a bank specialization that allows banking institutions to offer international trading services to their clients. In order to specialize in trade finance, it is vital for the financial institution to have a team of experienced individuals that work in this department, as it requires specialist knowledge to operate in this industry.

Offering trade finance services explained

Trade finance is a high risk bank specialization as it requires the banking institution to engage in international trade through issuing letters of credit for sale of goods, assisting in loans for exporters and various other industry specific services.

In order to offer trade finance services to your customers, banking institutions need to acquire a banking license that will enable them to deposit, engage in lending and send wire transfers. All bank licenses allow holders to conduct this form of business however, the type of bank license will determine the client base for the banks.

In addition to acquiring a bank license, institutions wanting to specialize in trade finance are required to obtain SWIFT membership. SWIFT membership will allow the financial institution to process and transact payments across the globe through bank wires. After the bank has obtained SWIFT membership, they are required to form relations with correspondent banks to carry out the bank wire transfers.

Lastly, a team of experienced professionals should be in place to work in trade finance as this is a very specific banking industry. The engagement with international trade requires specialist knowledge of individuals in order to successfully process and transact trade across the world.

In order to specialize in trade finance, it is advised to seek the assistance of a professional consultancy firm to ensure that the process is complete in a professional and timely fashion.