For many, the new year is a time to reflect on the twelve months that have gone by and make resolutions and visualise the year ahead. At TFG, we’re no different.
At the beginning of this year, we looked ahead and made a series of predictions for what we thought would be the biggest trends in trade, treasury, and payments throughout 2024.
As the year winds to a close we’re revisiting our predictions to see how well they measured up to reality. Let’s dive in!
Prediction #1: Uncertainty will underpin the macroeconomic landscape (again)
We started our prediction list with a bit of a lob ball – but we sure hit it out of the park. Our prediction that uncertainty would dominate the global macroeconomic landscape in 2024 was spot on.
The year was marked by slowing global growth, persistent inflationary pressures, and geopolitical disruptions. Central banks maintained cautious monetary policies, and China’s continued economic slowdown weighed heavily on global trade. Energy markets also faced volatility due to fluctuating oil prices amidst geopolitical tensions, including ongoing conflicts in Ukraine and the Middle East. Extreme weather and strike action around the world also disrupted global supply chains this year.
Adding to the complexity, elections in more than 60 countries helped to change the faces of leadership around the globe. Some of these, like Donald Trump’s re-election in the USA and the ensuing tariff threats and protectionist rhetoric, leave the world on edge leading into the new year.
Overall, 2024 helped reaffirm that uncertainty is the only certainty in the world.
Prediction #2: Supply chain finance expects lacklustre growth
Our prediction of sluggish growth in supply chain finance (SCF) during 2024 ended up being broadly accurate. The trade finance gap expanded and market conditions remained challenging, with tightened liquidity, cautious lending, and ongoing derisking by banks.
Geopolitical tensions, higher borrowing costs, and reduced risk appetite created a challenging environment for SCF in 2024, which strained access for some but created opportunities for non-traditional financiers to have an increasingly prominent role, with fintechs and alternative lenders stepping in to meet demand.
The broader SCF ecosystem saw slow but strategic innovation, with players focusing on simplifying processes and expanding coverage into underserved markets. While the sector didn’t experience transformative growth, it continued to evolve, positioning itself for a more robust recovery in the years ahead.
Prediction #3: Standards and frameworks will take centre stage
At the beginning of the year we predicted that developing standards and frameworks for digitalisation and ESG would be the emphasis in 2024. We got that one right.
In November, COP29 opened with an agreement on standards for the creation of carbon credits, and tradeable permits tied to greenhouse gas emissions used by governments to measure and limit emissions.
On the digitalisation side, the adoption of the UNCITRAL Model Law on Electronic Transferable Records (MLETR) gained momentum. Notably, France joined the cohort of countries recognising electronic transferable records, marking a significant step towards global digital trade harmonisation.
Work also continues at UNCITRAL on developing a comprehensive international convention to standardise negotiable cargo documents across multiple transportation modes. The group expects to complete this in late 2025.
These developments show an acceptance of the need for collaborative progress, focusing on establishing adaptable and technology-agnostic solutions to meet evolving digital and sustainability challenges.
Prediction #4: Increased demand will drive growth in trade credit insurance
Our prediction that demand for trade credit insurance (TCI) would grow in 2024 was well-supported by market developments. The ICISA industry report published this year (albeit reporting on FY 2023) showed that trade credit insurance has seen steady demand, bolstered by evolving global trade dynamics and rising counterparty risks.
According to the report, throughout the year insured exposure grew by 4.5%, totalling €3.2 trillion; premiums written increased by 5%, amounting to €8.2 billion; and claims paid rose by 11.4%, reaching €3.2 billion. Penetration rate also increased to 15.07% for 2023, up from 13.16% one year earlier, with currency exchange rates playing a role.
This increase was largely driven by the role that these products play in protecting businesses from the risk of non-payment, which became increasingly prevalent given the economic uncertainties in the market.
Prediction #5: Solving complex issues will be key to fintech survival
Our prediction that fintechs would face a make-or-break year in 2024 was well-founded. The reality of the fintech landscape this year has highlighted both the promise and perils of the sector, with advancements in artificial intelligence (AI), instant payment systems, and blockchain juxtaposed against the financial struggles of some once-promising companies.
Blockchain, once the trendy new technology that everyone hyped, is finally starting to become more mainstream. After what felt like endless white papers and Proofs of Concept (POC), the technology has started being applied to real-world problems to reduce costs, increase efficiency, and improve customer experience.
Replacing Blockchain as the hot new tech in town is AI. AI is impacting trade finance and payments by promising to automate risk assessments, fraud detection, and personalisation, particularly in supply chain resilience and operational efficiency. The adoption of AI in the financial sector has surged, with global AI spending expected to exceed $300 billion by 2026, according to industry reports.
Unfortunately, the year ended with news on several bank and non-bank lenders collapsing, notably, ABN Amro’s receivables finance team, Stenn and Kimura Capital. This will likely have compounding effects on appetite to lend to SMEs in 2025.
Prediction #6: An infrastructure revolution for payments
Our prediction that 2024 would mark a transformative year for payments infrastructure was accurate in part, though the anticipated revolution was more evolutionary than revolutionary.
The adoption of ISO 20022, while significant, has been slower than expected in transforming cross-border payments, and the promise of central bank digital currencies (CBDCs) and distributed ledger technology (DLT) for payments remains largely unrealised.
ISO 20022 adoption expanded globally, especially among larger banks, leveraging the data-rich messaging standard for competitive advantage. However, smaller institutions and developing markets have lagged behind. While some progress was made in using ISO 20022 to improve payment transparency and speed, its broader benefits have yet to be fully realised.
Despite these challenges, the payments industry did make strides in cloud integration and real-time solutions, fostering incremental improvements rather than wholesale transformation.
Prediction #7: Technology will aid decision-making in treasury
Our prediction that technology would transform treasury operations and decision-making in 2024 was largely accurate. Tools like APIs and AI are increasingly becoming mainstays for the contemporary treasury leader, though challenges such as privacy concerns and inconsistent liquidity management adoption remain. By identifying patterns, forecasting cash flow, and simulating liquidity scenarios, AI has begun to enable treasury teams to make faster, more informed decisions.
However, widespread adoption of real-time liquidity management tools has been slower than anticipated. While these systems can be powerful tools amidst changing market conditions, smaller firms tend to struggle with the cost and complexity of their implementation. Additionally, privacy and data security concerns continue to stand in the way of a deeper integration, as companies weigh the risks of exposing sensitive financial data to digital platforms.
The treasury transformation is ongoing, with many organisations leveraging APIs and AI for operational efficiency, but broader challenges suggest that the evolution will continue well beyond 2024.
Prediction #8: ESG is here to stay
At the beginning of the year, we predicted that ESG would remain central to business strategies in 2024. While this has largely remained the case, the conversation around sustainability took an unexpected turn over the course of the year. While progress was made in areas like harmonised reporting standards and carbon credit frameworks, a quieter, more cautious tone has emerged in corporate ESG efforts.
The enthusiasm that once surrounded ESG has faded. Concerns about greenwashing have given rise to “green hushing,” where companies downplay or stay silent on their sustainability efforts, either as a defensive move or due to diminished prioritisation. This trend has seeped into treasury functions, making the integration of ESG into financial strategies more subdued.
Despite this dip, the outlook for ESG remains promising. The regulatory environment, especially in Europe, is forcing companies to rethink sustainability as a strategic imperative rather than a checkbox exercise. Treasurers, in particular, are realising the potential of ESG investments to drive long-term growth and resilience without compromising profitability.
COP29, branded the “Finance COP,” was a milestone event, resulting in a global framework for tradeable carbon credits and substantial commitments by developed economies to finance green transitions in developing nations. These advances reflect growing regulatory and financial pressure to align global trade with sustainability goals.
The hope is that 2025 will reignite corporate enthusiasm for ESG, with treasury teams leading the charge towards sustainable finance, influencing supply chain practices, and embedding ESG into core business operations.
So, how’d we do?
Looking back at our predictions from the start of the year and comparing them to how events across the trade, treasury, and payments industries played out, we’re pretty happy with our predictions!
Of course, we can’t take all the credit. To make these predictions to spoke with some pretty smart experts across the industry and, well… stole a lot of their ideas, because they are the experts after all!
These trends reaffirmed the importance of staying informed, collaborative, and flexible. As we prepare for 2025, our new year’s resolution is to remain committed to tracking these developments, engaging with industry experts, and sharing insights to help our readers stay informed.
Here’s to another year of making bold predictions – and seeing how they stack up!
