Cash management and trade finance

, Expertise and innovation: How banks are helping clients navigate a fast-changing world

Digitalisation is one of the key factors driving the transformation of the payments landscape. How is Commerzbank adapting its cash management services to meet evolving client demands?

BR: The digital transformation of payments has seen a sharp decline in cheques and cash while paving the way for instant payments and entirely new products such as central bank digital currencies (CBDCs). These developments are changing the way we pay, both domestically and across borders – making transactions faster, simpler and more transparent for clients.

As we move forward, the concept of tokenised money – digital representations of money issued on a blockchain or distributed ledger – is gaining traction. Commerzbank is involved in influential initiatives – including Project Agorá, a BIS-led public-private collaboration exploring how tokenisation can improve cross-border payments. Another example is Fnality, a consortium of several international major banks that is currently developing a blockchain-based solution for settling payments in central bank money for multiple currencies.

Speaking of trade finance, how is digitalisation progressing in this area?

BR: While trade finance has historically adapted more slowly than payments, we are seeing significant progress. Banks, software vendors and corporates are increasingly leveraging technologies such as optical character recognition (OCR), AI and distributed ledger technology (DLT) to streamline transactions, enhance transparency and improve process efficiency.

The use of APIs, such as the standard Guarantee API developed by Swift and the International Chamber of Commerce (ICC), is instrumental in creating seamless and efficient trade finance operations, as is the deployment of approved standards.

While the underlying technology itself has been available for some time, its adoption and ecosystem approach to trade finance is gaining significant traction. This signifies a dynamic shift, leading to accelerated development cycles and quicker transitions within the trade finance ecosystem.

Further, the implementation of electronic trade documents is transforming the way trade transactions are conducted at various levels. Simple administrative documents in trade transactions are already delivered electronically in many cases, and the electronic bill of lading (eBL) is becoming increasingly important.

As a major player in trade finance, we are committed to supporting our clients and partners on their digital trade transformation journey. For example, in both Europe and Asia, we’ve launched pilot schemes to help our large corporate clients integrate electronic bills of lading and digital trade documents into their trade processes. We are also witnessing an increased demand for domestic digital guarantees. Through our collaboration with our partner Digital Vault Services (DVS), we have been able to meet the demand since the beginning of the year and will also offer this option for foreign guarantees in the fourth quarter.

We are also actively involved in industry conversations, working with organisations like Swift and the ICC to push for a clear, standardised framework that will help banks adopt the necessary infrastructure for digital trade.

Turning now to the topic of regulation, how can that be balanced with innovation to drive progress in the payments space?

BR: Striking a balance between regulation and innovation is crucial. Regulation sets standards and safeguards that ensure consistency and foster trust, while innovation introduces solutions that enhance efficiency and resilience and drive progress. The European payments landscape continues to evolve, driven by regulatory initiatives such as the Instant Payments Regulation (IPR), which came into force in April 2024 and was designed to accelerate the adoption of instant payments across Europe. We are currently working intensively on the implementation of all regulatory requirements that will come into effect on October 9, 2025. An example of this is the Verification of Payee (VoP), i.e. the matching of the IBAN and the name of the payment recipient.

Meanwhile, regulations surrounding open banking and open finance continue to evolve, with APIs now well established and influencing the services we can offer clients.

Another foundational element underpinning both high-value domestic and cross-border payments is ISO 20022, the global messaging standard. It enables richer, more structured data, allowing for streamlined reconciliation, improved fraud detection, regulatory reporting and more effective analytics, while also supporting the broader goals of the G20 Roadmap for Enhancing Cross-Border Payments.

Regulation and innovation undoubtedly work hand in hand to unlock new possibilities. Specialised fraud-prevention AI systems can enhance both security and efficiency; among other things, blockchain is being explored for its potential to boost transparency, traceability and settlement speed; and digital assets are beginning to reshape the ways in which value is stored and transferred.

Turning to changes in global trade flows, how can banks best support their clients as they respond to evolving market conditions and supply-chain dynamics?

BR: Change has always been part of global trade, but the pace and frequency of that change are different today. The time available for corporates to adapt is getting shorter, and we’re seeing supply-chain management strategies such as nearshoring evolve into “friend-shoring” or “ally-shoring” – where companies prioritise doing business with countries that share similar values, institutions and strategic priorities.

As banks, we need to be ready for this new reality – and the opportunities that come with rapid change. That means becoming faster, more flexible and always able to respond to changing client needs. One way we’re doing this is through digitalisation, which we have embraced as a core part of our strategy.

At the same time, the fundamentals remain just as important as they always have been – deep-rooted trade finance expertise, international reach and long-standing experience, providing the foundation to guide clients through complexity, whether they’re entering new markets or rethinking existing ones. What underpins this at Commerzbank is our comprehensive global network and our trade finance expertise built up over the last 155 years. Our local presence worldwide – as well as our network of partner and correspondent banks – will remain relevant to the new trade corridors that emerge.

An example of this is the development of our representative office network. A couple of years ago we opened offices in Morocco and Jordan, and we have also established presences in Lithuania and Pakistan. Key to this was seeing how our clients’ trade flows are developing, and determining how we can best support them.

Commerzbank recently introduced its Momentum strategy. How does this position Commerzbank to meet future client needs?

BR: 2024 marked a record year for Commerzbank, and our focus is firmly on the future with our Momentum strategy. We will be sharpening our focus on what we do best, and that includes ensuring we remain a strong, forward-looking banking partner. At the heart of the strategy is our commitment to continue offering excellent cash management and trade finance services right across our global network.

Our team of experts in Germany and more than 40 other locations around the world is perfectly placed to provide our clients with the service and advice they need to succeed across time zones and markets.

Through Momentum, we aim to deepen relationships with our Mittelstand and large corporate clients while at the same time expanding our business with German clients in the US and Asia. In addition, we’re actively building our presence in selected sectors in those regions.

We remain committed to maintaining a network that reflects the shifting nature of global trade – through our international presence, our representative offices and our partnerships with correspondent banks. Wherever our clients go, and however the landscape changes, we aim to be there – consistently, reliably and ready to support their ambitions.