Bank Trade Financing Innovation And Management Research

As China's imports and exports increasingly grow along with the socialistic market economy tends to be more flourishing, enterprises' funding demands from banks have expanded largely, which provide banks more favorable advantages to develop trade finance business. All banks, including nation-owned banks, joint-stock banks, regional commercial banks and foreign banks, have enhanced their marketing for trade finance, expecting to gain more benefits in the nation's spring tide of economic development. This paper, from the bank's perspective, analyses and probes into the most importance subjects on trade finance, which are innovation and management. To be more pertinent, the research on banks' management mainly focuses on the development of trade finance business in joint-stock commercial banks.As a traditional banking business, trade finance asks for more innovation, which is the central of research. Based on accumulated experience from practice and study of bank business environment, the author thinks that innovation in trade finance is not only an objective requirement of the global trade economy with shifted characteristics, but also a subjective demand of commercial banks, the provider of trade finance, to improve their competitiveness. The paper sets out from the characteristics of trade finance practice and its progress trend, as well as bases the discussion on relevant theories of trade finance, which include theoretical researches on development, innovation and risk management principles concerning trade finance. From this, considering business practice, the paper puts forward innovative perspectives, direction and specific procedures concerning trade finance by studying the current development of trade finance in domestic banks. The discussions on the applicability of trade finance in domestic trades, the way that structural trade finance exercises, supply chain, trade chain finance and so on are innovative both theoretically and practically. With regard to the designs of specific products, many have not yet applied in banking, while hopefully, they would inspire the peer group.Trade finance business has well operated in western commercial banks fornearly 60 years;however, it has widely accepted by china banks for no more than 20 years. Domestic banks have no systematic research and exploration on its business environment and long-term progress, lack of study on customer targeting, marketing strategy and risk management of trade finance, and their management of trade finance stay extensive. The relatively serious problems are customer selection and risk management strategy. Along with the further opening of the nation' s financial system, competitions among banks appear multiplex. The nation-owned banks are solid in strength, and foreign banks are highly specialized, which are challenges for joint-stock commercial banks when they grow trade finance business. From the work experience in a joint-stock bank, the author realizes that joint-stock commercial banks still lag far behind nation-owned banks due to restrictive factors such as capital scale, international funding capability, specialized experience, business layout netting, international status, etc. Therefore, the practical management of trade finance in commercial banks is an urgent subject for the nation' s financial sector, which is the other research focus of the paper. Customer selection, marketing strategy, risk management and business development strategy for joint-stock banks growing trade finance are discussed, among which the stress is on the nature requirement to combine trade finance with joint-stock commercial banks and small-middle enterprises. There are two innovative perspectives, self-compensating risk management idea and that the trade finance is the best way to serve small-middle enterprises.The scale expansion of trade finance enables the relationship between trade finance and the nation' s macro-economy become closer with certain bilateral influences, primarily on balance of payments, exchange rates and foreign currency regulation, etc. Researches on these topics are necessary either from the aspect of macro-economy or to guideline banking business, providing various points of view with realistic meaningfulness.The paper has five parts:Part one is the introduction, describing the topic' s background, literature review, research areas and methodology, etc. The aim is towrite a dissertation specialized on trade finance with personal work experience, researching on innovative perspectives, areas, as well as bank management, and providing some enlightenment and reference for both the academic and the practice.Part two primarily research on the reform and development of trade finance, illustrating the common characteristics of the progress and the trend of trade finance products, and stating that the business environment for trade finance, as compared to traditional, has changed greatly so that the innovation is imperative.Part three focuses on trade finance innovation on the bank side, starting from relative theories and innovative momentums to perspectives, areas and the whole procedure of products design in commercial banks. The academic has not yet formed a common understanding on structural trade finance and its application has not reached expectation. The applicability of structural trade finance discussed in the paper provides a way to innovate on trade finance, which will scale up banks' business coverage and custom resources.Part four the research on banks' practical management of trade finance. At present, domestic banks, no matter nation-owned commercial banks or middle-small joint-stock commercial banks, are lack of scientific management of trade finance. The discussion covers the management on customer targeting, risk management, marketing and strategy, all of which are essential to bank management and central of theoretical and practical research. And the discussion, closely integrating the characteristics of trade finance, brings forward banks' internal management strategies for growing trade finance, such as the relationship between trade finance and middle-small enterprises, banks' "selectiveness of doing business" , etc.The last part simply explains the relationship between trade finance and macro-economy, suggesting that the development of trade finance can not only facilitate export trade but also optimize balance of payments. At the same time, the growth of trade finance will impact international fund flow and foreign currency regulation.The article concludes that the live of trade finance depends on its innovation and management. The straightening up of domestic and global economic situations as well as the improved standardization of international financial market have provided favorable resources and environment for trade finance. Banks have to conform the characteristics and trend of trade finance, innovate at all levels from operation ideas to specific products, such as receivables finance, audaciously experience the structural trade finance, so as to advance competitiveness in the market. Trade finance is a bank asset, so its scaling up is sure to bring certain operation risk. Banks' implementation of reasonable internal management will guarantee the sound growth of its business. As for middle-small banks, they should have clear understanding of self strength and characteristics, insist on growing trade finance for middle-small enterprises, build up risk management system accordant with products characteristics, go along the way of business specialization, and effectively explore trade finance market.