Combining technology and teams to navigate global shifts in trade flows and economic activity

The economic landscape of the last fifty-plus years is being torn up and that’s having an obvious impact on cross-border trade and payments globally. The US Administration’s tariffs and the ongoing friction and shifts in trade and money flows are leading to difficult challenges for banks and their customers to navigate.

Whilst cross-border payments are shifting both in volume and currency, artificial intelligence (AI) and other emerging technologies can help businesses maximise efficiency and security amidst the chaos. 

But for these innovations to truly be effective, they must be implemented correctly, and embedded in the right team organisational structures and processes. 

It’s Not Just Tariffs Shaking Things Up 

With the uncertainty of tariffs levels and how long they will last, it’s now more important than ever to ensure that any transactions are able to be completed in a timely, compliant manner and as effectively as possible. This includes additional forex hedging and transactions. Failure to do so may lead to lost business at best, and hefty fines, reputational damage and even blocked transactions at worst.

Along with tariffs, businesses have to adapt to the changing economic activity levels for both retail and business clients. These changes in customer and client activity will shift the operational pressures within banks and across locations. For example, there was already a growth in alternative payment methods including mobile wallet payments, peer-to-peer payments and real or near-real time payments. Banks will need to ensure they find the right balance between enabling the evolving customer demands at the same time as adapting to the changing economic landscape.

Tech Is The Word and Cost Efficiency comes first

Undoubtedly, applying further automation will be one of businesses’ best ways to help alleviate the growing pressures and complexities. It’s essential to integrate tools that are flexible and easily adaptable to shifting scenarios. Being able to seamlessly connect with third party payment systems is also critically important. With a fully integrated solution, you get a clear view and less manual labour throughout the entire payment process. However, the team structures, policies and processes are just as important to both embed in a technology solution but also review and reimagine. Adaptability and agility across all these areas mitigates the impact of lower growth, revenue uncertainty and a need to increase efficiency.

The latest developments in AI-driven workflow platforms are enabling end to end automation and getting the optimum balance between automation and personal help and advice. This is critical for any bank and advisory based business. It’s far easier to generate blueprints of how to best streamline cross border trade and payment processes and quickly get this into a working application. This is important because it means businesses can now not just support new types of payments really fast but also adapt existing processes - we are talking about hours or days instead of the usual weeks or months.

Last but not least, we shouldn’t forget about the compliance hurdles with cross-border payments. If anything, the demands in this space, which fall into mandatory focus and spend, are increasing. A robust payment system has to automatically handle AML screenings, monitor sanctions lists, and manage tax and regulatory reporting, making the whole process a lot smoother and more efficient.

The Road Ahead

As global trade patterns and economic growth outlooks keep changing, both with or without tariffs, taking a balanced approach is needed to both apply the right technology and rethink processes and policies for adaptability. Applying automation and AI-driven technologies can be a game-changer to help smooth out any complexities and changes needed in trade and payment financing flows. Operational resilience, agility and effective risk management are always critical in times of change and uncertainty. Getting the right balance of technology, product and people change is the way to meet that uncertainty head on.