Trade Finance Needs Integrated Blockchain, AI Infrastructure, Forbes Contributor Says

The global trade finance industry needs an integrated platform built on blockchain and artificial intelligence to overcome the limits of existing financial infrastructure, according to a Forbes contributor.

Forbes reported on June 11 that Milan Gupta, a member of the Forbes Finance Council, wrote in a contributed article that the global financial system still depends on correspondent banking networks, paper documents and legacy messaging systems. He wrote that the structure is poorly suited to the speed and complexity of 21st-century trade.

Gupta said the trade finance market faces a funding gap of about $2.5 trillion. Letters of credit, bills of lading, invoice financing and compliance procedures are fragmented across banks, insurers, customs authorities and logistics companies, increasing costs and causing delays.

He described blockchain as a key technology for addressing those problems. An integrated distributed-ledger infrastructure could provide an immutable record shared among transaction participants, while smart contracts could automate settlement, document verification and financing execution in real time.

Gupta also wrote that compliance costs tied to anti-money laundering checks, know-your-customer requirements and sanctions screening are limiting access to finance for financial institutions and small and medium-sized enterprises in emerging markets. A platform combining blockchain and AI would allow multiple institutions to share verified identity data and transaction records, sharply reducing the cost of duplicate reviews.

He argued that governance of international financial infrastructure remains centered on advanced economies. Emerging economies including India, Southeast Asia and Africa are leading innovation in digital payments, central bank digital currencies and mobile finance, and the Global South should participate as a co-designer of financial infrastructure, he wrote.

Gupta also highlighted AI's role. He wrote that AI can analyze supply-chain data to detect fraudulent transactions, optimize liquidity allocation and improve credit assessments for companies with limited traditional credit histories. Global trade is becoming increasingly digital and decentralized, and an integrated platform built on blockchain and AI is becoming essential infrastructure for the global economy, he added.