The future of cash and trade: How innovation is supporting resilience and growth

Advances in cash clearing, payment rails and working capital finance can reshape how companies manage risks and position for growth.  

In today’s uncertain environment, with trade flows in flux and new technologies upending established business models, banking solutions are taking on new significance. Cash management and trade finance are the key foundations for businesses looking to pursue new markets and explore more innovative financial solutions. 

The current uncertain climate is a timely reminder for businesses in all sectors to review their financial foundations and ensure they are harnessing the latest developments in payments and transaction banking.

Reducing risks

Transaction banking tools have been steadily strengthened over the past decade as modern technology has transformed payment systems and clearing mechanisms.

It is easier to pay — and be paid — than ever before. 

At a business level, faster cash settlement reduces trade risks by reducing exposure to counterparties and making it easier for businesses to manage liquidity. 

These advances mean payments that once took days can now settle within hours, with clearer visibility, greater control and fewer errors. Yet the shift to real-time will also introduce new challenges: cyber risks, system outages, and intraday liquidity pressures can escalate quickly. Ensuring resilience is just as critical as ensuring speed.

As this quiet revolution in global payments continues, businesses in all sectors need to keep a close watch on a number of key developments: 
•    The widespread adoption of ISO 20022, a common messaging format for financial communications that enhances data quality, interoperability and compliance.
•    SWIFT’s GPI tracker, now connecting over 11,000 institutions, enables faster cross-border transactions with end-to-end transparency.
•    The Exceptions and Investigations initiative by Swift reducing manual back-office work, removing friction and boosting efficiency.
•    The rise of instant payments, with digital wallets and account-to-account payments now well established in multiple markets. Asia has been leading the way: India’s United Payments Interface (UPI) now processes over 18 billion transactions every month.¹

Growing the business

If advances in payments and cash clearing provide an efficient base for companies to build on, trade and working capital finance provide the scaffolding for growth. 

Receivables and payables financing is being transformed: platforms now cover global portfolios of buyers and sellers, provide tailored reporting, and even extend into inventory financing. Dynamic discounting solutions, pioneered by fintechs, allow suppliers to choose when to be paid, leveraging a buyer’s balance sheet instead that of a bank. Marketplaces are also emerging, where corporates can auction receivables to multiple funders, optimising their costs.

These shifts are expanding access to liquidity at a time when diversified funding is becoming more important than ever. In a world of trade tariffs and shifting trade flows, working capital solutions will be central to helping companies as they navigate higher costs, longer lead times and new supply routes.

The next wave

The strengthening of the core financial infrastructure of cash and trade is also ushering in a new wave of innovation that could have an even greater impact.

Stablecoins and Central Bank Digital Currencies (CBDCs) are being tested as alternatives to traditional clearing. Because transactions settle instantly on distributed ledgers, stablecoins and CBDCs could sharply reduce settlement risk, simplify reconciliation, and provide greater transparency across counterparties. Further adoption of blockchain technologies could allow for the tokenisation of new asset classes, creating new opportunities for funding and investment flows. 

Societe Generale was the first major financial institution to launch a USD-pegged stablecoin with the introduction of USD CoinVertible in 2023.² We continue to explore how blockchain-based settlement could reshape the market.

API technology is also opening up new possibilities. APIs already allow companies to leverage richer data and connect directly into banking rails, sometimes bypassing legacy networks altogether. In the future, they will allow greater levels of automation and efficiency, allowing businesses to reduce errors, manage complexity and unlock greater value from their cash and liquidity management. 

The rise of AI

Among the most transformative developments underway is the application of artificial intelligence across the payments and transaction banking ecosystem. AI is already being adopted in multiple use cases, while the potential for more valuable applications is only just becoming clear. 

Potential applications of AI in payments and transaction banking include: 
•    In cash clearing and payments, AI can help detect fraud and anomalies more accurately, reducing false positives, for example, in sanctions screening.
•    In payments, AI can automate currency conversions, reduce errors and speed up reconciliation.
•    In liquidity management, AI can sharpen intraday forecasting, helping banks and corporates manage balances and funding requirements more efficiently.
•    In receivables finance, AI can support due diligence, predict buyer behaviour, and even anticipate supplier financing needs.

The acceleration of these digitalisation trends also promises to reduce the dependence on paper-based documentation that has long exposed businesses to inefficiency and fraud risks. 

At Societe Generale, together with all stakeholders in the trade finance ecosystem – banks, corporates, carriers, insurers, fintechs, legal professionals and others – we are undergoing a digital big-bang transformation, particularly in relation to MLETR.³ This shift goes beyond addressing paper-based inefficiencies, fraud, errors and environmental concerns. It also tackles broader challenges around profitability, competitiveness and market attractiveness, positioning the ecosystem for a more resilient and future-ready digital landscape. And as sustainability standards rise, smarter systems will be critical to improving supply chain transparency. 

To harness innovations like these, companies first need to ensure they have the right foundations in place. The opportunity in cash management and trade finance lies in acting on what is already within reach, from real-time payment rails to receivables platforms, and staying alert to what is coming next. 

<sub>1. www.pib.gov.in/PressNoteDetails.aspx
2. www.sgforge.com/societe-generale-forge-launches-coinvertible-the-first-institutional-stablecoin-deployed-on-a-public-blockchain/</sub>