Context
This International Chamber of Commerce (ICC) Trade Register Report came into being during the global financial crisis of 2007-2009 through collaboration between the ICC, World Trade Organisation (WTO), the Asian Development Bank (ADB) and various other partners and policymakers. The ICC Trade Register (TR) is the authoritative voice for the trade finance industry, setting standards and benchmarks for industry practices when it comes to default risks and LGD modelling for trade as an asset class.
Founded in 2009, the Trade Register Report currently has 22 contributing member banks that contribute trade asset, default & recovery data.
As of 2024, there have been more than 15,000 downloads across institutions, corporates, academia, and others.
Over the years, the ICC Trade Register has influenced global regulation, helped banks unlock millions in capital savings and empowered smarter decisions, stronger risk management and better regulatory alignment by:
- Applying lower risk weights to trade finance assets, unlocking 30–60% of tied-up capital backed by supporting data.
- Reducing up to 90% in expected credit loss reserves, improve provisioning accuracy and boosting balance sheet flexibility.
- Saving €1–2 million in annual liquidity costs and benefiting from improved regulatory treatment of short-term trade products.
2025 ICC Trade Register
Trade Register 2025 Report: Key Insights
In a year marked by profound shifts, during which trade leapt from a niche issue to a front-page story, the ICC Trade Register and the purpose it serves have never been more essential.
The findings in this year’s report continue to support the longstanding conclusion that export finance presents a low risk for banks. This results from its low Expected Loss (EL), which derives from a low Loss Given Default (LGD), combined with a default rate comparable to lower than investment grade project finance and corporate finance assets.
Overall, from 2023 to 2024, global exposure-weighted default rates for import letters of credit decreased to just below the seven-year average (between 2018 and 2024). Obligor-weighted basis default rates, however, went up, rising slightly above the seven-year average. Default rates increased marginally on a transaction-weighted basis, as well. This points to potential early stresses in small- to medium-size (SME) segment.
Default rates for performance guarantees (including standby letters of credit) increased marginally in 2024 relative to 2023 across all three measures. These increases were largely driven by APAC, the Middle East, and Europe.
Export letters of credit grew versus previous years, however, defaults were almost entirely concentrated in Russia, which is likely related to economic sanctions placed following its full-scale invasion of Ukraine.
Growth in trade finance has seen a gravitation towards working-capital products over the last decade, leaving documentary trade revenues to grow more slowly between 2020 and 2024. BCG forecasts in the report that documentary trade will have a marginal growth of 3.1% CAGR from 2024 to 2029, behind the 4.2% CAGR forecast for receivables finance. Despite this slowdown, documentary trade is expected to remain a core component of the trade finance market well into the 2050s.
Of the many insights in the report, let’s look at two in some more detail.
1. GenAI moving from Pilot to Platform
Modernising Trade Finance: The shift to Generative AI
Over the past two years, many banks, global and regional alike, have started to swap monolithic trade finance cores for cloud-native microservices. 100% of survey respondents have said that digital transformation is a medium or top priority. This is also corroborated by a recent report published by Standard Chartered Bank, which surveyed 1,200 corporate leaders from 17 markets across four key industries – consumer and retail, energy, power and TMT. Key findings on emerging technology were cloud computing (68%), AI (55%) and digital assets (50%) as the top 3 drivers that will shape trade digitalisation in the next three to five years.
A critical starting point for financial institutions and particularly banks, when setting their trade AI strategies and roadmaps, is identifying the business problems they need solved, while considering whether that solution can be quickly scaled up to ensure success.
In other words, selecting the right use case helps answer the scalability question upfront and supports the selection of the right AI tools from the multitude available.
In line with this, there are several core trade use cases today where AI can have significant impact on global trade over the short term, and where banks are already active, such as:
- Automated document handling
- Better risk management
- Streamlined client onboarding
Early adopters are likely to see cost-to-income improvements as savings scale exponentially once GenAI spreads across sanctions screening, client onboarding, and secondary distribution.
Risk functions, meanwhile, gain real-time capabilities that can feed early-warning models and may ultimately lower losses. 90% of survey respondents in the ICC survey indicated investment in AI, with 65% either building or having built AI tooling. However, several regulators (for example, the EU AI Act and New York City law) remain sceptical of LLM explainability; there may therefore be a need for the industry to expand its engagement on audit trails and model validation.
2. Geopolitics and tariffs
Impact on global trade
The global trading environment is evolving from a predominantly global, rules-based framework into a more fragmented, multi-polar system—a move accelerated by the ‘America First’ trade policy. Tariff uncertainty spurred some exporters to diversify invoice currencies, and local currency settlement initiatives in ASEAN advanced.
In 2024, trade growth was led by Asia (in particular the China-ASEAN-India corridor), whilst Europe experienced marginal contraction and North America posted modest gains. A stronger ‘Global-South-to-Global-South’ dynamic emerged as developing economies traded a greater share of manufactured goods amongst themselves.
Looking ahead, the outlook is more pessimistic due to heightened geopolitical volatility. Merchandise volume growth finally turned positive but still lagged the pre-COVID trend, whilst cross-border services surged almost 10%, contributing three-fifths of the $1.2 trillion expansion in world trade. Growth, moreover, arrived with new costs: elevated shipping costs, geopolitical unrest, sustainability surcharges, and sharper trade policies. Looking back at 2024, we saw signs that trade was recovering, rerouting, and repricing risk, but not reverting to the relative simplicity of the 2010s.
The BCG Global Trade model embedded in the Trade Register forecasts 3 probable scenarios out of 5 possible ones outlined in the figure below:
- Liberalising agenda: Tensions ease, tariffs remain at pre-2025 levels, and a patchwork of plurilateral and bilateral deals restores predictability.
- Regional Blocs: Blocs (e.g., Americas, Europe and APAC) deepen internal liberalisation while raising barriers to outsiders
- Multi-polar patchwork: Corridor-specific rules, export controls, and overlapping geopolitical spheres create a fractured system marked by uncertainty.
As it stands today, #3 seems to be the most likely outcome resulting in contraction in overall trade by 2024 versus the baseline case. In short, tariffs will have a contractionary impact on trade in the next 10 years unless tensions ease and tariffs are scaled back as in scenario #1.
Trade Register 2025
In summary:
In 2024, trade finance continued to be a low risk asset class as evidenced by the ICC Trade Register Numbers, albeit with some signs of stress in the small-medium enterprise segment. As interest rates ease in 2025 and beyond, this should further relieve some pressure on borrowing costs on SMEs.
AI has the power to be transformative, particularly when the right use cases are selected across augmentation, automation and risk. Early adopters are likely to see cost-to-income improvements as savings scale exponentially.
Tariffs could play out in multiple, but on the whole, they are likely to have a contractionary effect on global trade along with more global fragmentation and a regional consolidation of trading blocs.
