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Summary
- The trade finance deals with reference to commodities such as grain, oil products, metals, and fertilisers have gone up by 45 per cent year-on-year by volume.
- AI systems would help in improving the dynamics of payment and settlement systems in terms of trade finance and letter of credit.
- Sberbank is expected to leverage upon its big data capabilities to explore new segments in the domain of trade finance.
The banking sector grappled with challenges throughout 2020. From pandemic, rising debt pile, US-China row to the emergence of P2P lending platforms, the banks have seen it all.
Despite the prevalent uncertainties, Russia's largest lender Sberbank of Russia PJSC (LON:SBER) invested in developing the artificial intelligence (AI) infrastructure to identify new business and growth opportunities to derive growth amid the challenging trading environment.
As a result, the Russian bank witnessed a substantial boom in its trade finance arm. Moreover, the bank invested in digital technology adoption to improve their service offerings. Sberbank is expected to leverage upon its big data capabilities to explore new segments in the domain of trade finance.
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There are trillions of financial transactions that are being carried out both domestically and internationally. Machine learning capabilities, coupled with recommender systems, can do wonders in the area of banking and finance. The big data analysis can help in understanding the needs of consumers that would help the bank to improve its product offerings. Moreover, these artificial intelligence systems would help in improving the dynamics of payment and settlement systems in terms of trade finance and letter of credit (LOC).
The trade finance deals with reference to commodities such as grain, oil products, metals, and fertilisers has gone up by 45 per cent year-on-year by volume. The clients have the convenience of applying LOC and escrow accounts remotely due to new technological infrastructure. This has led to a surge in the number of escrow accounts year on year and is expected to boost the growth for Russian lenders in the near future.
Notably, 85 per cent of escrow accounts were applied online. The SberBusiness mobile app facilitates LOC transactions and same day payments in a matter of minutes. The bank reported substantial rise in LOC’s being issued through SberBank's online mobile application.
The investment done by the bank in the artificial intelligence domain and technological advancement helped the Sberbank's trade finance and documentary operations arm move up the value chain as it witnessed a 70 per cent jump in the aggregate value, which was recorded at $54.5 billion.
The banking group was recognised as the Best Trade Finance Bank in the Eastern European region and was awarded Global Trade Review's Leaders in Trade 2020 award recently. The Russian lender has witnessed a substantial amount of increase in the volume of transactions spanning across countries.
Sberbank of Russia PJSC is a full-fledged commercial bank that accepts deposits and offers credit products. The bank offers products for both retail and commercial customers that include demand and term deposits, loans, credit cards, forex & securities brokerage services.
