Do letters of credit have a future in the current economic landscape?
Trade finance and letters of credit are substantially being impacted by economic instability. As a result of this, banks must consider how they can keep the trade finance offering up to date with corporate client expectations in order to remain relevant.
While banks and their corporate clients are already aware of the need to move away from paper and manual processes, the imperative to digitize operations has recently grown exponentially. Given the current economic climate, businesses may find challenging to satisfy their financial obligations, particularly those linked to letters of credit. As the economy slows down, banks are considering digitizing letters of credit to improve their risk assessment and management while monitoring borrowers for signs of financial stress.
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