Trade and Working Capital

James Fraser:

Welcome to the show. Trade finance isn't easy. In fact, these days it can be incredibly complex. So let me break it down into something a bit more digestible. This is wool. It's been traded for thousands and thousands of years. Archeologists have found wool and other textiles dating back to the earliest civilizations, like here in Mesopotamia. In fact, they've also unearthed some of the earliest examples of trade finance. Merchants issued the very first promissory notes on clay tablets like this one. This tablet is essentially a letter of credit, a promise of payment. The entire world is your neighboring region. And sure, we've had some amazing advances in technology to make that trading easier. We also have some things that make trade finance even more complex.

So let's look at wool in recent years. A use case single-handedly dominated our lives just a few years ago, the hoodie. In the pandemic, we didn't have casual Friday. We had casual every day. Demand went through the roof. So retailers try to quickly procure large amounts of inventory, impacting their cashflow. Then what happened? Supply chain issues. They couldn't get the inventory fast enough. After all, the hoodie isn't just wool. Lots of different suppliers, lots of different timelines. And that's where trade finance can get tricky. Oftentimes the manufacturer doesn't have the cash to pay the supplier upfront. They also have no idea when they'll get paid back because items may be backordered. The price of raw goods fluctuates week after week.

One tailor-made solution to this problem is supply chain finance. It gets the supplier paid early and gives the manufacturer more time to pay, closing the working capital gap for both parties. Of course, the kicker is once the retailers got all these hoodies in stock, people started returning to the office and demand changed from this wool to this wool.

Trade finance today is challenging and always moving and that's where JP Morgan thrives. We've been doing it for more than a hundred years. We have all kinds of innovative digital solutions to help improve your working capital and cashflow, so we can help you overcome whatever the world throws at you. How do we do it? Well, simple. We get to know your business, your objectives, and together we find a solution that's right for you. Because just like this, it's not one size fits all. Hey, do I get to take this home? Oh, cool. See you guys next week.

For thousands of years, global trade has fueled our greatest advancements by allowing those who specialize in anything to exchange that for everything. Shaping societies, building economies, driving progress towards the future from close to home to far from home yesterday, today, and tomorrow. Global trade shapes how we live, what we make, and how we do business.

At JPMorgan, we have been leading trade for over a century. And with our new market-leading investments and alliances, our future looks even brighter. As a leading bank in global trade, we are here to advise and help you navigate the digital revolution with predictive payment behavior, credit analytics, other big data and AI insights that facilitate automation.

Solve your evolving and complex trade challenges with unmatched industry experts who help clients build strategic and tailored solutions. Optimize your working capital needs to meet your risk mitigation and cash flow objectives. And contribute to a more sustainable and equitable world by removing the paper and developing innovative ESG finance programs.

And position your business to thrive in an era of service, technology, and industry transformation all backed by security you can trust. As we enter a new era of trade, we are here to simplify the challenges you face wherever you operate at every step of your journey because this is what we specialize in so you can specialize on your anything. Welcome to the future of trade. We are Trade and Working Capital at JPMorgan Payments.