Global challenges, local solutions: how banks can help with the complexities of international trade

Sabine Zucker: The last few years have seen significant change, mainly due to increasing geopolitical risks, which have manifested themselves in the form of shifts in supply chains and increased regulatory requirements, i. e. sanctions. These in turn have been cushioned by the banks' traditional trade finance products, above all bank guarantees and letters of credit. They not only reduce geopolitical risks for the beneficiary, but also offer financial compensation in the event of supply chain disruptions caused by other factors. The industry also makes a significant contribution to securing resilient supply chains through nearshoring.

Daniel Rath: The various crises in recent years have shown that the key parameters for our customers are flexibility, resilience and speed. The COVID-19 pandemic and the accompanying, sometimes forced, digitalization have further highlighted these values. We at RBI have responded to this by automating our processes and making them more efficient, which has enabled us to accelerate our processing steps and thus our customer focus immensely.

Zucker: The trend is clearly moving towards ESG financing, where sustainability criteria play an important role. This is also being driven by the Supply Chain Act, which ensures the origin of the goods and environmental standards. In addition, the focus on resilient supply routes will continue to increase and nearshoring is becoming increasingly popular due to its de-risking component. Another trend is the reduction of bank connections and the optimization of payment flows. Last but not least, there is a recognizable trend towards more credit insurance. 

Rath: The topics of sustainability and long-term safeguarding of the business model are and have always been important parameters for our customers in their business practices, regardless of any additional regulatory requirements. As Sabine has already mentioned, we at RBI are there to recognize these trends, evaluate them together with our customers and structure the right financial and risk minimization solutions on this basis. We offer comprehensive instruments for this purpose, especially in cooperation with external organizations such as export credit agencies (ECAs, e. g. OeKB).

Rath: As RBI, we support our customers globally in their trading activities. We have just had a case in which our customer did not receive the agreed service from its supplier in the emerging markets. As the underlying contract was secured by RBI, our customer was able to utilize one of our performance guarantees and received payment from us for the non-delivery within five banking days. The fact that we received a counter-guarantee for this transaction from a bank in the exporter's country of origin means that the risk remains with RBI and our partner bank. This is a classic example of hedging business and political risks.

Zucker: The different regulations and laws in the various jurisdictions are actually one of the biggest challenges in international trade. Companies must ensure that they have the right partners and specialists at their side, as this can drastically minimize business and sanction risks. Thanks to its extensive international network of subsidiary banks, branches and representative offices, RBI has a high level of expertise in local regulations and can therefore provide companies with optimum support. With the advisory services of the International Desks in CEE, we offer solutions that are specifically tailored to local requirements.

Rath: The tariffs introduced by the Trump administration have impacted European exports to the US, particularly steel and aluminum products. This could have a noticeable but not decisive impact on euro area GDP. In addition, Trump's economic policies have led to increased volatility in financial markets, reflected in fluctuating interest rates and exchange rates. In my view, the greatest danger is that the logic of universal import tariffs will prevail and lead to a spiral of ever higher tariffs, which would be detrimental to global trade in the long run.

At RBI, we support our clients with comprehensive risk mitigation measures and tailor-made financing solutions. These include instruments such as guarantees, sureties and credit insurance. We use our global network to accompany and support companies in uncertain times.

Zucker: In times of geopolitical uncertainty and political change, it is crucial that companies with international trade relations have comprehensive risk protection. Implementing tailored short- and long-term solutions with a trusted partner is essential for companies. With a team of dedicated experts and an extensive global network, RBI is ideally positioned to support companies in this way. Our comprehensive and flexible solutions in the areas of trade finance, export finance and capital markets enable companies to effectively protect and strengthen their international trade relationships even in uncertain times.

Rath: Close cooperation and a deep understanding of our clients' individual needs are crucial. We not only offer traditional trade finance instruments, but also develop innovative solutions tailored to today's challenges. These include digital platforms for faster and more transparent trade processing and partnerships with international financial institutions and export credit agencies. We keep our clients informed of the latest developments and best practices in international trade finance through regular training and workshops. This is how we ensure that they are always optimally positioned.