Insights and Highlights: Reflections on Conferences Around the World
Written by Paul Bower
The Autumn conference season is a busy period for FGI as we connect with colleagues and friends from across the ABL, Trade Finance, and Factoring markets. As a multinational business, FGI attends a wide variety of conferences around the world. I recently had the opportunity to be at the forefront of 3 different events which offered key themes, differences and common trends shaping the industry. The FCI Central and Eastern Europe (“CEE”) conference in Prague highlighted the CEE factoring community’s awareness of challenges on its doorstep and passion for promoting and supporting SMEs. The SFNet Annual Convention in Houston underscored that there are opportunities to be made for everyone and that there is a growing awareness of cross-border financing. Finally, the GTR Nordics event in Stockholm highlighted the importance of collaboration, and exchange of ideas and the increasing role of technology in the Trade Finance space.
Reflecting on observations from each event, it’s clear that several themes are rising in importance throughout the world and call for consideration as we enter a new year.
Observations
Economic Influences
The economic environment underpinning each of these markets at the time of the respective events varied significantly and has impacted the confidence in the rooms. Naturally for a Central and Eastern European conference as the FCI CEE, there was discussion of the ongoing conflict in Ukraine and the continued impact this is having in the European Economy. Additionally, the economic slowdown in Germany is restricting growth in neighbouring economies but receivables finance is outpacing the general economy and becoming increasingly mainstream. Despite the immediacy of the US election at the time of the SFNet convention in Houston, political and credit risk concerns loom larger in European markets than in the US, and secured lending remains a generally growing and optimistic environment on either side of the Atlantic. The US has seen an uptick in the market as interest rates come down, giving a general confidence for 2025. There is a curiosity on the impact of increased US tariffs under the new administration.
Digitisation
Digitisation and the importance of clear data strategies are the common themes for lenders and investors everywhere. AI is a growing presence but the aim of the game right now for lenders and partners across the sector is to optimise their current operations with connected data and a clear strategy. AI and its potential to impact Asset Based Lending was a topic of discussion at the SFNet Convention in Houston. While everyone seemingly knows AI is increasingly present and that the opportunities (and challenges) for lenders in the space are significant, few have established a consistent use case yet. The challenge as AI emerges is having a proper digital strategy and being clear on the data you hold. Discussions at the GTR Nordics event reinforced the importance of digital interconnectivity from all players, tech platforms, insurance providers, lenders and corporates. Trade Finance is on the cusp of major change with the role out of MLETR (Model Law on Electronic Transferable Records) and related DNI (Digital Negotiable Instruments) initiatives, and its vital that lenders and associates embrace tech solutions to manage the transition. Adopting technology and the use of data is the coming challenge. Lenders must invest in tech to stay relevant. This investment delivers clear benefits in the short term and will underpin transitions with AI and other data dependent applications over the coming years. Opportunities are great for those that do.
Regulation
Regulatory changes and the impact of Basel III/IV were a key theme of the FCI CEE, with much conversation centring around the use of credit insurance with the right advice and policy structuring to manage capital relief and the right investment in tooling to aid reporting. While regulation and Basel III/IV looms larger in the European sectors, it is becoming an emerging point of discussion in the US. The common theme is clarity on data with appropriate tooling to enable efficient reporting and analysis on exposures supported by working with specialist providers who are experts in the space.
Use of Credit Insurance
Credit Insurance is very much a standard part of lending in both the Factoring and Trade Finance environments in Europe, with the market well aware of its benefits and the logistical controls needed to optimise it. This was evidenced in FCI CEE discussions mentioning that the secured finance market is still dominated by factoring in its various forms. In the US, Trade Credit Insurance awareness is still emerging amongst lenders but catching up fast.
Sustainability
Sustainability and the role of finance in helping the transition to Net Zero are bigger topics in Europe, perhaps influenced by energy price shocks over recent years, but there are signs of growing awareness and new initiatives from lenders in the US market as well. As the GTR Nordics event was held in Stockholm, a net zero carbon city, sustainability and the move to renewables were key conversations along with the best practice to manage the transition and the role of finance to help speed up the process.
Conclusion
In all markets, there is a strong sense that the big forces of global economics and politics are having an increased impact on the everyday considerations of lenders and the businesses they serve. The US market remains bullish in comparison with Europe, but lenders everywhere are mindful of the need to be adaptable to fast changing situations. Harnessing data to make better informed decisions is a universal theme.
If this strikes a somewhat pessimistic tone, the dominant feeling on the ground is one of opportunity for the Secured Finance sector. There is a sense that the industry is naturally better suited to dynamic environments than other forms of conventional lending and that changing times present great potential for growth. Adoption of new Technology solutions and complementary products is increasing at pace and bringing real transformation to the sector, not just in the back office but right the way through to the customer. The signs are that for many, 2025 will be the year of action and delivery, where long talked of initiatives move off the whiteboard and into the front line. A call to action for the industry and a time to get moving. FGI Tech looks forward to playing a big part in that delivery.
For more information or to arrange a consultation on what we can offer you, contact Paul Bower, pbower@fgiww.com
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