Digital Trade Finance Starts with APIs

Trade Finance remains one of the most document-heavy, manually orchestrated areas of banking. Each action, e.g. requesting a status update or submitting an amendment, typically requires human intervention. This can slow down processing times and makes it difficult for businesses to integrate trade data into their own systems.

APIs can change this dynamic by enabling real-time connectivity between the bank and a corporate’s ERP or treasury system. APIs can automate steps that previously required manual touchpoints. For example, businesses can check transaction statuses instantly or trigger actions programmatically. 

This matters beyond pure efficiency: corporates who can connect directly from their ERP to a bank’s systems tend to stay. Integration creates stickiness.

What Can a Trade Finance API Do?

At a practical level, Trade Finance APIs can expose a wide range of data, such as:

• Real-time transaction status
• Document check results
• Discrepancy notifications 
• Shipment and transport milestones
• Invoice-level data for supply chain finance

They can also provide functional capabilities, including submitting applications, uploading/retrieving documents, requesting financing and verifying invoices. 

By digitising these interactions, APIs help banks reduce workload, speed up turnaround times, and overall deliver a better experience to corporate clients who increasingly expect real-time visibility and direct system-to-bank connectivity.

In 2023, the International Chamber of Commerce (ICC) and SWIFT released the first API standards for Bank Guarantees and Standby Letters of Credit, covering the full lifecycle for these instruments. Banks such as Standard Chartered and BNP Paribas have already either piloted or launched this API for their own corporate clients.

While still in its infancy, the API standard aligns with existing messaging infrastructure as well as ISO 20022 compliance to ensure compatibility with legacy systems. It also uses RESTful APIs and JSON payloads, which aligns with Open Banking and Open Finance standards in use today. 

Bank Guarantees / Guarantees Issuance and Status Visibility

In 2019, HSBC released its first Trade Finance API for banking guarantees. It lets partner banks issue guarantees through HSBC even in markets where the partner has no local presence, and gives their customers more visibility over the status of their bank guarantee. Since then, HSBC has expanded its Trade Finance API catalog to cover several more use cases.

Standard Chartered, a pioneer in API solutions, also provides an API for bank guarantees and related functions that follows the ICC/SWIFT API standard. 

Bank Guarantees are often cross-border and involve multiple banks; this type of API simplifies orchestration and delivers real-time status and documentation to clients, which reduces the manual back-and-forth typical for guarantees. 

Supply Chain Finance / Invoice-based Financing

HSBC has made available Supply Chain Finance APIs that allow buyers to submit approved invoices or credit notes directly to the bank from within their own ERP or treasury system. Using this API, HSBC’s customers can not only submit invoices or credit notes, but also submit applications and check application statuses in real-time. 

Standard Chartered provides an implementation example with Linklogis, a supply chain finance technology platform. The partnership developed two custom APIs – Trade Limit Check and Finance Status Check APIs – to create a direct link between the bank’s back-office and Linklogis. Originally, Linklogis would have to reach out to Standard Chartered manually to request the outstanding limits, and the resulting report would be shared via Host-to-Host connection at the end of the day. Now, Linklogis can monitor their clients’ status in real-time.

Letters of Credit and Document-based Trade Flows

HSBC also provides Import/Export Letters of Credit as well as Import/Export Collection. Through these APIs, corporates can submit LC applications or collection instructions, track statuses, upload or retrieve documentation, and manage amendments. 

Traditional LC workflows rely heavily on manual document handling, but APIs turn this into a structured and digital process that can be managed directly from a corporate’s ERP platform.

It’s easy to look at the examples above (HSBC, Standard Chartered, BNP Paribas) and assume that Trade Finance APIs are a Tier-1 game. But that misreads the opportunity.

The real opportunity lies with mid-market corporates – companies large enough to have ERP systems and treasury teams, but not large enough to command dedicated attention from a Tier-1 bank.

These corporates are actively reassessing their trade finance partnerships for various reasons, including gaps in integration. But, mid-market corporates are not necessarily loyal to the largest bank or the fastest fintech – they are loyal to the bank that makes their lives easiest. Today, this increasingly means direct ERP connectivity, real-time visibility, and not having to pick up the phone for a status update.

This pattern is visible across South East Asia. Techcombank in Vietnam – one of the largest private banks in the country but by no means a global name – has built API-driven trade finance capabilities including digital bank guarantees and direct ERP connectivity for corporate treasury clients.

A similar logic drove Bank Mandiri in Indonesia to build its Kopra platform – an API-driven wholesale banking solution covering cash management, supply chain and trade finance – earning it the Domestic Trade Finance Bank of the Year in 2024. 

A regional bank that offers a clean, well-documented Trade Finance API can become genuinely sticky with this segment. 

The above use cases focus on documentation, status, and application submissions, but the long-term vision is for a digitally integrated, end-to-end trade ecosystem where physical supply chain data and financial data flow seamlessly.

APIs may eventually link all stages of a trade, including pre-shipment finance, shipment tracking, post-shipment payments and reconciliation. Integration across multiple systems (ERP, logistics, customs) will become increasingly important to offer a seamless experience. 

Additionally, the current supply chain logistics landscape is becoming more digitised, with technologies such as real-time tracking via IoT/NFC and distributed ledger (DLT) systems for immutable record-keeping. Incorporating this data could enable more automated risk assessments, credit scoring, and financing triggers.

While this vision represents the future, banks should begin by implementing foundational APIs for key workflows today — a necessary first step to prepare for a fully integrated, data-driven trade finance landscape.

While the vision of a fully digitised, end-to-end trade ecosystem is compelling, the path to get there begins with foundational steps. Trade Finance departments can start small, test, and scale while preparing for future integration.

1. Identify key pain points and workflows: Map the manual, paper-heavy processes that create delays or errors. Gather input from corporate clients to understand their specific priorities, such as real-time visibility, integration with their ERP, or faster financing approvals. 
2. Define Initial API Use Cases: Start with high-impact, low-complexity workflows, such as transaction status updates and document submission/retrieval. In other words, use cases that are useful but also technically achievable. 
3. Build internal alignment: Involve IT, operations, and compliance teams early to understand technical feasibility, regulatory requirements, and security considerations. 
4. Choose the right technical approach: Decide whether to develop APIs in-house or leverage partner platforms or fintech solutions. Start with sandbox environments and test the APIs internally before moving to pilot.
5. Pilot, measure, iterate: Select a small number of clients and enable sandbox access to test the Trade Finance APIs. Track performance improvements and participant feedback, then use these learnings to go to production and later expand APIs to additional processes. 

Banks with existing Open Banking sandboxes and developer portals are also in a good position to reuse these tools. They can leverage much of the same API infrastructure, security, and sandbox environment for Trade Finance, while accommodating the additional complexity of document-heavy workflows. 

APIs in trade finance can become a strategic enabler for faster and more digitally integrated trade workflows. Leading banks are already piloting or providing these APIs, and the broader trend towards digital supply chain integration is only speeding up. For banks outside the tier-1 bracket, the window to act is now, while corporate clients are forming habits around the banks that give them real-time visibility and direct connectivity, and those habits are hard to break. 

For Trade Finance departments, the key is to start small, leverage existing Open Banking infrastructure, identify one high-impact use case — such as real-time guarantee status or invoice submission — and pilot it with 2-3 corporate clients. As outlined above, OBP’s Dynamic Entities and Endpoints can significantly accelerate this, allowing your team to stand up Trade Finance APIs without rebuilding your entire API layer. 

Reach out to explore how your team can make use of your existing API capabilities to launch a Bank Guarantee or Letter of Credit API.