Simply put, trade finance is the financing of the import and export of goods and services. Not surprisingly, the economic downturn forced private lenders to pull back on trade financing, just as in other areas of commercial lending. Now, trade financing is making a comeback, especially with increased interest in the customer base in emerging markets.
Predictions are that trade finance banking divisions and trade finance firms are likely to see modest growth in 2012. In an interview with eFinancialCareers, U.S. Bankcorp’s Robyn Todd, Vice President and Regional Sales Manager-Pacific Region, Global Trade Services, discusses the skills needed to work in trade finance.
"The best candidates will have a strong understanding of international trade," says Todd. "Individuals working in trade finance must understand the common issues that businesses confront when operating globally, such as political and economic risks, currency issues and cultural differences. Experience working in foreign countries or with companies engaged in international trade is valuable, and foreign language skills are a plus."
Financial vehicles or products used in trade finance
"We routinely work with letters of credit, documentary collections, banker’s acceptances, Eximbank-backed [Exim is short for export-import] transactions and international treasury management services," explained Todd.
Common job titles and responsibilities
"Entry-level positions are often found on the operations side of the business, whether it be processing international financial instruments or payments, or performing credit analysis on international banks," she says. "Mid-level positions include trade finance sales officers, country risk managers, operations supervisors and structured trade finance originators. Country managers, team managers and division managers are a few examples of senior-level positions within trade finance."
"Many careers start with entry-level positions in operational areas," Todd notes. "However, there is often an opportunity to move up, such as by gaining experience working for an importer or exporter, or having direct experience working for a foreign bank or in a foreign location. People with a background in finance or sales often pursue a career in trade finance."
Call for trade analysts and credit portfolio managers
Word on the street is that there’s a growing call for trade analysts and credit portfolio managers to work in trade finance here in the U.S., as well as a variety of trade finance professionals to work in Asia-Pacific.
"As more U.S. companies go global, the demand for trade specialists who understand the risks involved is increasing," she explains. "The demand for Asia-Pacific professionals here and abroad has risen rapidly as trade between the U.S. and Asia has grown significantly."
"Trade finance is a highly specialized field, therefore compensation can be higher than in traditional areas of commercial lending," says Todd.
Transitioning from commercial lender to international trade
"There are many unique aspects of international trade that a commercial lender would need to learn about," Todd points out. "However, if a commercial lender can build their understanding of the differences in payment methods, risks and cultures, they can certainly make that transition. Many commercial lenders have done it and are happy they did!"
Helps to be multi-lingual
"When you have language skills, your ability to work successfully with your trading partners and customers is greatly enhanced, as is your value to an organization. Among the important languages used in trade finance today are Chinese, Korean, Japanese and Spanish," says Todd.