In the complex world of trade finance, amid shifting supply chains and growing geopolitical risks, having a trusted banking partner is key to safeguarding your business and ensuring the flow of critical goods. And when it comes to choosing a working capital and trade finance provider, pricing is key, followed by credit limits and service quality.

These are some of the insights Asset Benchmark Research ( ABR ) picked up in the annual Treasury Review 2024 ( TR 2024 ), where we engaged with over 500 treasury management professionals including CFOs and treasurers across the region last year.

CFOs and treasurers are prioritizing competitive pricing when selecting a working capital and trade finance provider because it directly affects their company's cost structure, profitability, and financial efficiency.

Competitive pricing encompasses several key components, including interest rates on trade finance products, transaction fees, foreign exchange costs, and other service charges. Lower interest rates on working capital loans, supply chain financing, and trade credit facilities reduce the cost of borrowing, allowing businesses to allocate more funds towards growth initiatives rather than debt servicing.

Talking about the service quality of trade finance service providers, respondents stressed that response time to queries was very important, followed by speed of implementation and readiness to customize.

In trade finance and working capital management, businesses deal with time-sensitive transactions, such as letters of credit, bank guarantees, supply chain financing, and payment processing, where delays can disrupt supply chains, damage supplier relationships, and even lead to financial penalties.

A bank that provides quick and accurate responses ensures that businesses can resolve issues promptly, access necessary financing without delays, and maintain smooth cash flow operations.

In 2024, respondents said they generally relied on bank loans, retained earnings and trade finance facilities for their sources of funding to support their respective organizations. These sources of funding provided a balanced approach to liquidity, cost management, and financial stability.

Bank loans remained a preferred choice as they offered structured financing with predictable repayment terms, enabling companies to secure immediate capital for working capital needs, expansion, and operational stability without diluting ownership. Given the interest rate differential between the US dollar and other local currencies in Asia, respondents noted that local currency financing for activities was key to ensuring working capital sufficiency.

Stay tuned in the coming weeks for more insights from the TR 2024.

To view the previous article on TR 2024 about how respondents addressed their cash management needs, please go here.

Are you a CFO, treasurer or treasury management professional? If so, please take part in our annual TR 2025 where you can share your views on the trends shaping your profession and rate the service providers you work with.