by Kirk Lundburg, CEO & President at Trade Technologies, Inc.
Through investments in infrastructure, innovation, and incentivizing digital adoption, the Middle East is rapidly emerging as a global leader in digitization. The region has seen a surge of digital transformation in recent years, driven by the rapid adoption of cutting-edge technologies such as AI, blockchain, and cloud computing. From Dubai's smart city initiatives to Saudi Arabia's digital health services, the Middle East is setting new benchmarks for digital innovation. Leading companies such as Emirates NBD, STC, and Aramex are at the forefront of this trend, leveraging technology to drive growth and improve customer experiences.
The META region's digital economy is rapidly expanding, and experts at the International Data Corporation (IDC) predict that investments in digital transformation will exceed USD 48.8 billion by 2023. This surge is expected to continue at an impressive compound annual growth rate of 16% in the years to come, culminating in a total investment of over USD 74 billion in 2026. This seismic shift towards digitization highlights the importance of adapting to new technologies and embracing digital transformation to stay competitive in today's business landscape.
One of the most significant challenges for the Region's and the world’s digital transformation is to pivot away from traditional manual processes and paper delivery to digitized delivery and automated processes in trade finance. The most challenging type of trade transaction for digitization is the export letter of credit (LC). While the LC is a powerful tool for reducing credit risk and assuring prompt payment, it is heavily reliant on manual processes and delivery of paper documents to multiple parties around the world.
Digitization of the export LC process involves the use of online systems like the Trade Technologies’ TradeSharp™ platform to provide a common digital connection to defeat the vast geography of international transactions. TradeSharp has been used over the last 20 years to complete 220,000 online presentations with a value of over USD 60 billion. Digital presentations enable fast, secure, and efficient processing by exporters and banks.
In 2020, Trade Technologies went live with its TradeBridgeAPI for Banks which extended the automation of letter of credit transactions to include trade bank processing. TradeSharp and TradeBridge enable exporters to receive payment faster, and banks to process more transactions with fewer people, reducing the time and cost of the entire transaction.
In 2022, TradeSharp was used to process over USD 16 billion of export transactions (with over USD 1.5 billion shipping from or to the Middle East). Over 53% of those presentations were made, in whole or in part, online. 24 banks in 13 countries are connected to TradeSharp for receipt of digital trade presentations.
Trade Technologies is eager to bring its technology and expertise to the Middle East and to do its part to accelerate digital trade in the Region. Trade Technologies opened its 16th global operations office in Dubai during the pandemic to support exporters and banks in the Region. Trade Technologies is currently working with its existing bank and exporter customers with a presence in the Middle East to bring the power of automated processing and digital presentations to the Middle East. As the business grows, additional banks and exporters will be added to the platform. The combination of Trade Technologies’ industry-leading digital technology and the Region’s focus on digital initiatives is bound to drive values across the region’s many exporters and trade banks.