Noor Bank: Blockchain to transform trade finance in the UAE
Blockchain has the potential to transform trade finance in the UAE with faster shipping and settlement as well as a reduction in transaction costs, according to a new report by Noor Bank, launched at the latest meeting at the Noor Business Council.
The Noor Business Council, launched in May 2018, is a thought leadership platform held in the presence of 150 SME and large corporate clients. The new report, entitled ‘The Evolving Landscape of Trade Finance in the United Arab Emirates’, the white paper captures the findings of a study Noor Bank conducted in collaboration with business intelligence service provider MEED to highlight unique insights into the current trade finance landscape and assess the impact of digital tools on the industry.
“The launch of the white paper aligns with the UAE’s goal to enhance its position as a global trade hub through expanding its trade infrastructure and diversifying its export mix, especially in non-oil sectors. The report sheds light on the role of ethical finance solutions in shaping the future trade mix as well as the growing importance of e-commerce on the trade finance landscape,” said a statement from Noor Bank.
The report also underscores the significant trade growth in the UAE in 2017 riding on the back of a booming export and re-export sector. The value of global trade is expected to reach $24 trillion in 2026, spurred by higher commodity prices and burgeoning South-South trade.
The Asia Pacific region accounted for 47 per cent of global trade finance transactions in 2017, valued at $2.1 trillion, according to Noor Bank’s findings. Meanwhile, the MENA region with 11 per cent of all transactions has the world’s second-highest trade finance rejection rate, 18 per cent, due to the risk profile of clients and quality of applications.
“Despite trade wars and the renegotiation of long standing agreements, trade finance remains a major driver of cross-border business operations. With the export and re-export business in the UAE recovering, we are confident that Noor Bank’s Islamic finance solutions will go a long way in promoting ethical and sustainable global trade practices,” John Iossifidis, CEO of Noor Bank, said in his opening statements.
“Our second session of the Noor Business Council convened our key corporate and SME stakeholders to discuss the state of trade finance in the UAE, and explore ways of supporting sustainable trade and enterprise,” Iossifidis said in a statement after the event.
“Trade finance is an important segment for Noor. With trade volumes doubling in this competitive and evolving marketplace, we focus on offering a holistic solution to help our trade clients achieve operational excellence by addressing their specific needs,” added Kazim Ali, Head of Corporate Banking at Noor Bank.
