Nothing stands still when it comes to technology. One sector where this is particularly evident is in business-to-business (B2B) trade. New technological innovations known as trade technology (or TradeTech for short) are revolutionising the way businesses interact and trade with each other.
The adoption of TradeTech is particularly significant for European SMEs. These businesses often face a plethora of challenges that large corporations do not. For example, they may lack resources and access to specialised financial expertise, struggle with cash flow, and find it difficult to get trade credit.
The Promise of TradeTech
Trade technology focuses on improving and modernising areas of trade. How? By innovating digital solutions that smooth out trade between businesses. The promise of TradeTech falls into three main categories:
- Supply chain improvements. Transforming supply chains. Adding end-to-end visibility. Improving resilience and security.
- Risk management. Decreasing financial crime related to B2B transactions. Improving responsiveness to potential trade risks.
- Enhanced trade opportunities. Improving trade facilitation. Looking for new business models. Focusing on transparent and sustainable trade. Valuing inclusivity (e.g. levelling the playing field for SMEs).
To help understand TradeTech and its roles in B2B trade facilitation, read on!
Trade technology simplifies transactions and payments: seamless financial operations
Gone are the days when international trade transactions were complicated and fraught with risks. (Well, maybe that’s a bit too optimistic - but we’re getting there!) Technology in trade is transforming transactions from a web of complexity into a walk in the park. Digital payment solutions enable businesses to facilitate transactions smoothly in a risk-savvy way.
An example of a cutting edge payment solution is Terms.Tech, which provides a wide-ranging B2B payment suite covering the whole EEA and Switzerland. Terms.Tech takes on the credit risk. It also easily integrates with other digital solutions. For example, marketplace orchestrators (like Marjory.io) and European PSPs (like Digiteal) to ensure lightning fast and safe onboarding and payment processing, respectively.
Physical documentation is phasing out. Streamlined invoicing and billing further enhance operational efficiency. Secure protocols ensure safe transactions, which boosts trust among trading partners. A clear disruption to how paper processes have been dealt with until today, doubling down on speed and security.
The EU has made efforts to guide and regulate digital payment services. Have you heard of the Payment Services Directive 2 (PSD2)? And, it’s further evolving with the ever-changing landscape via its recent proposal for PSD3 and the first Payment Services Regulation (PSR).
Enhancing efficiency and productivity: streamlining trade operations
Trade technology is fundamentally transforming and simplifying trade operations. Using TradeTech solutions is like giving your company a few shots of espresso! It drives efficiency and productivity in unprecedented ways. Tasks that were previously time-consuming and prone to human error, like order processing and inventory management, can now be automated. This frees up valuable time and resources.
Trading in real time
With real-time data tracking and analysis, businesses can make informed decisions swiftly. Result? Improved operational efficiency. Supply chain management is yet another facet where TradeTech shines. Businesses can now track products in real time. They can also predict possible disruptions and manage logistics like never before.
Expanding market reach: accessing global opportunities
TradeTech also expands market reach for businesses. Trade technology is about creating opportunities that didn’t exist before. With online marketplaces, for example, businesses can connect with prospective partners globally, transcending physical boundaries.
Evolution of TradeTech: embracing future innovations
TradeTech continues to evolve and thrives on innovation. Emerging technologies such as hyper-trendy and game-changing artificial intelligence (AI), the Internet of Things (IoT), and web 3 applications, e.g. blockchain, are constantly evolving to help companies trade better with each other. Pioneering technologies are becoming more and more integrated into the business landscape. So, we can expect even more new trade opportunities.
The businesses that will thrive in the future are those that can anticipate these trends and adapt their operations. By embracing the evolution of trade technology, businesses can secure their position in the market. TradeTech may be the key that ensures sustained growth in the years to come. Implementing the right trade technology solutions can also compensate for a lack of operational expertise affecting many SMEs.
Want to help build a TradeTech venture?
Is TradeTech just a shiny new tool you’ll use once and then forget about? No way! Trade technology is proving to be an invaluable asset in B2B trade. It enhances the efficiency of trade operations. It improves communication and data awareness. It simplifies, secures, and speeds up transactions. It expands market reach - conquer the world! It even safeguards data and minimises risk.
Here at AREA42, we strive relentlessly to develop TradeTech solutions that address the Trade Finance Gap. One way we do this is through our venture-building studio, MISSION42. We explore, question, validate insights, deep dive with customers, and build new trade technology tools for SMEs to smooth out B2B trade.
Find out more about MISSION42. Want to join us and build TradeTech ventures? What are the benefits of participating in a venture-building studio?
Check out our call for applicants - B2B trade innovation is at your fingertips! Let’s make it easier to do business and shape the future of B2B.
(image credit: DALL-E-2)
