South Korea Trade Finance Market- Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The South Korea Trade Finance Market is segmented by Service Provider (Banks, Trade Finance Companies, Insurance Companies, and Others) and By Application (Domestic and International).

Market Snapshot

South Korea Trade Finance Market
Study Period: 2018-2027
Base Year: 2021
CAGR: >5 %

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Market Overview

Depending on the degree of confidence between counterparties and the amount of funding required from banks, trade finance can take many different forms. If the transaction only involves the importer and exporter, it can be completed on an open account basis or a cash-in-advance basis (money is received before items are dispatched). Banks nevertheless play a part. To reduce the risk of non-payment, banks provide products. The exporter asks the exporter's bank to produce documents and obtain money from the importer as part of the documented collection.

Early in 2022, the Omicron variant's popularity caused South Korea's Covid 19 numbers to skyrocket. Even with the COVID pandemic, Korean growth has been consistent. However, inflation has risen, primarily due to increasing prices for imported petroleum and industrial inputs.

Additionally, American businesses have been collaborating with Korean local businesses to increase market prospects in third-country markets including ASEAN, the Middle East, and other markets in the Indo-Pacific. With exports of goods and services accounting for 36% of GDP in 2020, Korea will continue to be one of the industrialised countries most dependent on exports. Korea serves as both a market destination for American goods and services and a hub for market development into other countries because to its strong maritime and air freight infrastructure.

Scope of the Report

Trade finance refers to the financial products and services used by businesses to facilitate cross-border trade and commerce. Commerce financing makes it easier for importers and exporters to conduct business through trade. Trade finance is a general term that includes a wide range of financial tools used by companies and banks to streamline trade operations. A complete analysis of the South Korea Trade Finance Market, which includes an assessment of the emerging trends by segments, significant changes in market dynamics, and a market overview, is covered in the report. The South Korea Trade Finance Market is segmented by Service Provider (Banks, Trade Finance Companies, Insurance Companies, and Others) and By Application (Domestic and International).

Service Provider
Banks
Trade Finance Companies
Insurance Companies
Others
Application
Domestic
International

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Key Market Trends

Increase in Exports Activities Is Booming the market

About half of South Korea's GDP comes from exports, and 25% of those exports go to China, which is its largest trading partner. The recurrent devaluations of China's currency have started to hurt South Korea, which has been battling with the rise of its currency, the won, versus the Japanese yen in important export markets. According to preliminary data, South Korean car shipments fell sharply by over a third in August. Smartphone exports increased, but rapidly developing Chinese handset manufacturers are now competing with South Korean company Samsung Electronics for market share worldwide.

Chinese holiday shoppers are also being deterred by the weakening yuan, despite the nation's efforts to win them back following a Middle East Respiratory Syndrome.

South Korea Trade Finance

Increase in SMEs is driving the market

The engagement of SMEs in imports and exports can serve as a proxy for the demand for trade finance products. Small and Medium-Sized Enterprises (SMEs) play a crucial role in South Korea's economy, which cannot be understated. The core of the Korean economy has always been comprised of SMEs. In Korea, SMEs account for 91% of businesses, 83% of all jobs, and 34% of exports. Considering the domestic presence of MNCs and other large companies, this is a sizable share. Support for this important area of the Korean economy has been continuous. The Ministry of SMEs and Startups was established in 2019, before COVID, to serve as a source of encouragement and support for all SMEs. The government believes that small businesses and start-ups are essential to addressing Korea's high young unemployment rate because they generate more than 80% of all jobs in the nation.

Policies and programs that first served as pandemic reactions to short-term disruption are now anticipated to aid SMEs in adopting digital technology in the long run. In response to the COVID-19 problem, the Korean government moved swiftly, expanding existing programs and adopting several new measures to promote industry adoption of digital tools. The automation of administrative operations, assistance for firms to adopt remote working, and support for digital cross-border sales were among the major programs.

South Korea Trade Financing

Competitive Landscape

With both domestic and foreign participants, the South Korean trade finance market is competitive. The market under study has the potential for expansion during the time period, which is anticipated to increase market competitiveness. 

Major Players

  1. Bank of America

  2. Bank of New York

  3. Citibank

  4. Woori Bank

  5. Nonghyup Bank

Keyplayers and Market Concentration Chart template (3).jpg

Recent Development

  • In May 2022, To increase its competitiveness in the global trade finance market, Korea's Shinhan Bank introduces S-TBML. A big data-driven anti-money laundering (AML) system has been implemented by Shinhan Bank in South Korea to identify questionable trade transactions and boost its competitiveness in the global trade financing market.
  • In 2021, With the aid of trade fairs supported by the UK government, UK exporters closed over £70 million in sales to South Korea 2021. Deals signed at trade exhibitions supported by the Department for International Trade will see British goods sold to South Korea, including offshore wind technologies, life jackets, and hydrogen fuel cells.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS AND INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Insights on Various Regulatory Trends Shaping Trade finance Market

    5. 4.5 Insights on impact of technology and innovation in Trade finance Market

    6. 4.6 Industry Attractiveness - Porters' Five Forces Analysis

      1. 4.6.1 Threat of New Entrants

      2. 4.6.2 Bargaining Power of Buyers

      3. 4.6.3 Bargaining Power of Suppliers

      4. 4.6.4 Threat of Substitutes

      5. 4.6.5 Intensity of Competitive Rivalry

    7. 4.7 Impact of COVID-19 on the Market

  5. 5. MARKET SEGMENTATION

    1. 5.1 Service Provider

      1. 5.1.1 Banks

      2. 5.1.2 Trade Finance Companies

      3. 5.1.3 Insurance Companies

      4. 5.1.4 Others

    2. 5.2 Application

      1. 5.2.1 Domestic

      2. 5.2.2 International

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Market Concentration & Overview

    2. 6.2 Company Profiles

      1. 6.2.1 Bank of America

      2. 6.2.2 Bank of New York Mellon

      3. 6.2.3 Citibank

      4. 6.2.4 HSBC

      5. 6.2.5 Woori Bank

      6. 6.2.6 Hana Bank

      7. 6.2.7 Nonghyup Bank

      8. 6.2.8 Shinhan Bank

      9. 6.2.9 BNP Paribas

      10. 6.2.10 KB Kookmin Bank

    3. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. DISCLAIMER AND ABOUT US

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Frequently Asked Questions

The South Korea Trade Finance Market market is studied from 2018 - 2027.

The South Korea Trade Finance Market is growing at a CAGR of >5% over the next 5 years.

Bank of America, Bank of New York, Citibank, Woori Bank, Nonghyup Bank are the major companies operating in South Korea Trade Finance Market.

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