Naeem Khan is the global head of trade finance at Crédit Agricole CIB. Equipped with close to 25 years of experience working in trade, in this next instalment of Marco Polo’s ‘The Innovator’ series, he shares his views on the importance of technology-led solutions for driving change within the industry, and how old-school mentality could possibly be impeding the take-up of new initiatives.

Q: Covid-19 has accelerated digitalisation efforts in trade. How has the pandemic impacted Crédit Agricole CIB’s approach to digital trade? Are trade finance banks’ priorities shifting? 

Khan: The business challenges brought about by the Covid-19 pandemic have accelerated the need for companies of all sizes to digitise their operations to overcome travel restrictions, boost efficiency and – importantly – to mitigate the fraud risks that have multiplied during this period. 

Global financial institutions, including Crédit Agricole, have taken significant steps towards becoming more digitalised. 

The pandemic has really pushed us to change our mindset. The dynamics of how we work has shifted. We are now able to process trade and commodities transactions anywhere in the world through our global processing system, which replaces the geography-specific systems of the past. 

I am particularly keen to further develop the implementation of AI and robotic solutions in the credit process, which is giving us a real edge in terms of being able to serve our clients in real time. Moreover, our bank is committed to developing application programming interfaces (APIs) in its IT architecture, as these are essential to the new digital world.

Q: Crédit Agricole CIB joined the Marco Polo Network last year and has been involved in test transactions utilising the Network’s set of trade instruments. What are your thoughts on the merits of a network approach for trade and supply chain finance?

Khan: Clients are really pushing for multi-bank platforms and the competitive conditions offered by such solutions. Marco Polo, through its innovative approach based on DLT, is one of the few truly global multi-bank solutions. It has already succeeded in uniting some 30 banks and major corporates around the world. 

In mid-2020, we performed pilot transactions on the Marco Polo Network making use of the Payment Risk Management solution. This included successful transactions with global corporate Voith and German bank LBBW. We also explored other features, including the Receivables Finance solution. 

These solutions that Marco Polo is rolling out certainly bring a number of efficiencies and processing capabilities for the client. Like the other Marco Polo partner banks and our interested customers, we look forward to these solutions gradually moving into real production. As is often the case, the greatest obstacles are not technological but human – cultural and even generational – and there is still a lot of work to be done on that.

Nevertheless, we truly believe that this initiative will bring a lot of innovative solutions to the trade industry as a part of that ecosystem.

Q: Marco Polo’s Payment Risk Management module provides an alternative to the letter of credit: how can an instrument like this open up access to trade finance, particularly for smaller companies?

Khan: This type of innovation aims above all to provide large and small companies with protection against non-payment and access to financing for their working capital. It does so with flexibility and at an acceptable cost, and at a time when many players are weakened by a lack of financing. It brings companies much closer to banks, which will help to alleviate the trade finance gap. 

The advantages of the Payment Risk Management solution compared to a Letter of Credit is the time saving for issuance and payment, the absence of postal delays and losses, and of course the opportunity to electronically verify trade data while controlling the risk of non-payment. Overall, it creates more efficiency. 

Smaller companies are very price sensitive, and efficiency in that regard is one of the reasons why they are interested in the Payment Risk Management solution.

“This type of innovation aims above all to provide large and small companies with protection against non-payment and access to financing for their working capital. It does so with flexibility and at an acceptable cost, and at a time when many players are weakened by a lack of financing. It brings companies much closer to banks, which will help to alleviate the trade finance gap.”

Naeem Khan, Global Head of Trade Finance at Crédit Agricole Corporate and Investment Bank

Q: Crédit Agricole CIB has a big focus on developing sustainability-driven trade products: what are some of the bank’s recent success in this regard? What options could the Marco Polo Network provide in terms of facilitating sustainable trade? 

Khan: A predominant part of a company’s carbon footprint is embedded in its supply chain, so trade brings a major opportunity to address the current environmental and societal challenges. 

Crédit Agricole is playing a significant role in the financing of the energy transition. In terms of recent successes, over the last few months, we supported leading polyester recycling company Far Eastern New Century Corporation in its sustainable journey with sustainability-linked facilities, and also helped Gammon Construction Limited implement one of the first green guarantees in Asia Pacific.  

But it’s important to note that banks alone cannot provide the solution. The financial sector provides the oxygen needed for change; it is not the change in itself. In order for sustainability to thrive, it is key to have a network effect with the maximum number of actors. From that perspective, it is indeed very positive to see that the Marco Polo Network already offers the option to support sustainable trade finance by using sustainability certification, for example. This is something we are currently discussing.

Q: How can some of the barriers to the adoption of new and innovative solutions be addressed? 

Khan: I don’t think people understand – and are perhaps not convinced by – all the many disruptive technology initiatives that exist within the trade space. A lot of that has got to do with the fact that there are many very experienced people working within the industry, which is great, but it also means that a lot of these people have been around for a long time, making it quite difficult to change the culture and the mindset. 

I am a strong advocate of supporting the next generation of trade financiers, and have been actively involved in driving interest in trade finance at French universities. We have to make a conscious effort at the senior level to attract new talent and unite them with our knowledge-rich veteran colleagues.

Technology plays an important role by enticing the new wave of trade professionals and offering them the prospect of being able to be a part of the industry’s evolution. It also equips them with the tools to be able to drive change.

“I don’t think people understand – and are perhaps not convinced by – all the many disruptive technology initiatives that exist within the trade space. A lot of that has got to do with the fact that there are many very experienced people working within the industry, which is great, but it also means that a lot of these people have been around for a long time, making it quite difficult to change the culture and the mindset.”

Naeem Khan, Global Head of Trade Finance at Crédit Agricole Corporate and Investment Bank

Naeem Khan

Naeem Khan is Global Head of Trade Finance at Crédit Agricole Corporate and Investment Bank. Based in Paris, France, Naeem is globally responsible for the trade finance business line globally, including origination and structuring activities. Assisted by regional heads in Europe, Americas, Asia, Middle East and Africa, Naeem manages a global origination team of around 100 professionals based in over 21 countries, offering financial solutions to corporates, banks, multilaterals and sovereign involved in international trade, including all types of documentary credits, international contract financing, open account financing, trade syndication and trade assets distribution.

With extensive commercial banking experience, Naeem has been associated with the Crédit Agricole Group for the last 23 years. He held various regional positions in project finance, assets-based financing, coverage (corporate and financial institution) and export and trade finance in the MENA region before assuming his current position in Paris in 2012.  

Naeem graduated in Advance Management Program at INSEAD, holds a BSC Degree in Economic and a Diploma from the Banker’s Institute.

About the author
Shannon Manders is an editorial consultant and award-winning international trade finance journalist with over a decade of experience reporting and producing print and online publications on the global trade and trade finance sector. She is also the editorial director of international trade finance publication GTR, where she has been working since 2008.