What 2019 global trade trends should you be looking out for? Here’s a preview of what could be dominating the headlines and your work conversations throughout the next 12 months.

1. Will the new USMCA be ratified?

After over two years of anti-NAFTA rhetoric from President Trump and many rounds of negotiations, a replacement deal to govern North American trade, the US-Mexico-Canada Agreement (USMCA) was finally signed by the leaders of Canada, the U.S. and Mexico on November 30, 2018.

Before coming into effect, however, the deal must be ratified by the legislatures of all three countries. This step could be particularly challenging in the U.S., where a newly elected Democratic Congress may object to some aspects of the deal or simply be unwilling to give Trump a victory on the issue.

While the general sentiment is hopeful for a full ratification in 2019, a significant roadblock in any of the three countries could leave the issue open-ended for at least several more months.

2. Brexit is coming

With a March 29, 2019 date set for the UK to officially leave the EU, Theresa May’s government has little time left to gain domestic support for the Brexit deal she has negotiated. While a December vote was postponed due to a lack of support, May has survived a non-confidence vote and re-scheduled the Brexit vote for the week of January 14.

If a deal is not reached by the March 29 deadline, the UK will face a “hard Brexit” with no guidelines determining significant UK-EU issues like the Irish border, migration, travel, and trade. Despite UK government plans for this contingency, a no-deal Brexit could send the British economy spiralling downward with negative implications for the global economy as well.

3. Is your data safe?

As major corporate data breaches become increasingly common headlines, and the value of data seemingly increasing every day, companies face a conundrum: how can they gather the data they need, but also keep it safe?

Adding extra levels of online security and authentication for customers, as well as changing internal processes to improve passwords, store data more securely and eliminate potential security gaps may all need to be added to your 2019 to-dos to ensure a high level of trust between you and your customers, suppliers and partners.

4. Addressing gender inequality to improve economic opportunities

Despite a growing awareness and focus on the importance of women’s entrepreneurship, studies show that many challenges remain. According to a policy research paper published by the World Bank, the “gender gap in business ownership remains high in many economies around the world”, and “the gap in female entrepreneurship is especially apparent in low-income economies, where women are much less likely than men to start a new business.”

New research from PayPal Canada and Barraza and Associates also indicates that in Canada, “on average, women-owned businesses earn $68,000 less than men who run similar businesses.”

As issues like access to venture capital and corporate procurement opportunities continue to face women-run businesses, one area of success is in e-commerce businesses. 50% of new e-commerce businesses started in the last two years in Canada are run by women, compared to just 34% 10 years ago.

5. AI tools becoming increasingly commonplace

AI has several applications in international trade, from analyzing metrics and economic trends or optimizing warehouse and inventory management to linguistic translation and online sales or chat services, not to mention exporting AI tools themselves.

As technology is refined and these tools are more widely understood, questions regarding data security and IP protection are starting to come to the forefront. But for businesses willing to take the leap, AI has the potential to transform some of their business practices and give them a competitive advantage in their industry.

6. The CPTPP comes into effect – how could it affect you?

As of December 30, 2018, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) comes into effect. This trade deal replaced the TPP after President Trump withdrew the U.S. from that agreement in January 2017 but still includes the other eleven countries from that deal: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The agreement removes the vast majority of tariffs and other trade barriers, and enforces new standards for human rights and environmental and labour practices.

Will there be a noticeable increase in trade between businesses in these countries? And with opportunity for new countries to join the deal at a later date, could early successes entice any other countries to take steps towards entering the agreement?

7. The fading appeal of Bitcoin and other cryptocurrencies

A year ago, the potential for Bitcoin or other cryptocurrencies to serve as a transformative tool in global finance seemed high. Bitcoin’s value had never been higher, and increasing numbers of banks and other financial institutions were taking steps into the cryptocurrency arena.

What a difference a year can make.

After a December 2017 high of $20,000, Bitcoin is currently valued around $3,500. Other major cryptocurrencies are also valued at 85-90% below their all-time highs. Public excitement has turned to skepticism in some corners, or concerns about fraud and scams in others.

Even if values increase in 2019, significant changes will be needed to restore trust and support in cryptocurrencies before its wider acceptance in international trade can be re-considered.

8. Accelerated growth of service export industry should continue

Service exports can cover a multitude of areas: international customer service, financial, legal or consulting services, research and development, online services and platforms, and more.

In Euler Hermes’ 2019 forecast, they predict service exports to be the fastest-growing trade economic sector, with an estimated global growth of $365 billion USD, similar to 2018 growth levels.

As service export opportunities continue to grow in the world’s largest economies and emerging economies alike, businesses should look for ways to expand their service offerings through methods like servitization, or service exports directly connected to your existing product exports.

9. Personalizing is key to reach new customers or businesses

With the increasing numbers of ads, emails and content out there competing for attention, more businesses are trying to apply the personal touch in an effort to stand out.

From using increasing amounts of data to target specific ads to personalizing email offers and even web pages around user behaviour and interests, there are more ways than ever to make someone feel like your efforts were created just for them.

On the other side, businesses are increasingly turning back to old practices that had fallen by the wayside. Personal calls, direct mail and printed media like magazines or booklets are returning to the marketing playbook, as what was once cliché is now a novel or unique approach again.

10. Small businesses need employees ready to help grow and expand to new markets

According to a Business Development Bank of Canada (BDC) survey, about 40% of small businesses are unable to find the right employees to grow. EDC also noted fewer Canadian businesses are newly exporting or planning to export to new markets in the near future.

To overcome these challenges, small businesses require employees able to research international markets, assess potential risks, create and implement market entry strategies and manage the international logistics, finance, marketing and sales, and other areas.

Looking for practical, flexible training to take your business into new international markets with confidence? Check the full list of EDC-FITT online courses and workshops to see which options work best for you.

We face an eventful year ahead, full of innovation, political risks, and important new opportunities for business growth.

What trends will you be most interested in throughout 2019?

The post 10 global trade trends we’ll be watching in 2019 appeared first on Trade Ready.

After a surge of initial excitement, the mania surrounding cryptocurrencies has somewhat subsided since December 2017. Cryptocurrency prices might be in the gutter right now, but some of the brightest minds in tech still have their noses to the grindstone trying to drive crypto projects forwards.

The question is: are these tech pioneers are flogging a dead horse, or is there something behind the claims that the technology behind cryptocurrency is one of the most important fintech advancements in history?

“It’s bigger than the Iron Age, the Renaissance. It’s bigger than the Industrial Revolution.”  – Tim Draper – US Venture Capitalist.

Globalization has spawned a complex network of international trade and business. For cryptocurrency to live up to the promises made by commentators like Tim Draper, it is clear that it must disrupt and create value in international business. Only then will cryptocurrency enact true change on a global scale.

Current trade barriers come at a high cost to businesses

It’s no secret that international business is a logistical challenge. Global trade is dominated by multinational companies that have a global approach to operations, production and markets. This means supply chains commonly span multiple nation states.

Even relatively simple business functions, such as payments and product component shipments, can cause logistical issues. That’s not even accounting for added barriers such as the different importation and exportation regulations that multinational companies have to comply with across their global supply chains.

Right now, international business is being held back by the following factors:

• high banking fees
• terrible currency conversion rates
• human errors in documentation
• improper document storage
• slow payments and document transfers

All these factors require multinational corporations to expand payroll to deal with them and keep their global supply chains running smoothly. Needless to say, this added cost places a burden on international business and erodes profit margins.

According to the World Economic Forum’s report on Enabling Trade: Valuing Growth Opportunities, reducing the barriers faced by global supply chains could increase global trade by up to 15% and increase overall GDP by 5%. This equates to around a $3 trillion uplift in global economic output per year.

To put it another way, companies with global supply chains are collectively losing $3 trillion per year to these challenges.

How can cryptocurrency help offset supply chain costs?

Cryptocurrency has given us two main technologies to streamline supply chains. These are:

Blockchain: This is a digital public ledger that records information securely, publicly and with an indisputable time stamp. The problem with traditional means of storing data is that there is usually a single point of failure. History has shown that even multinationals are not immune from having their data estates compromised and having to deal with increasing regulatory pressure or penalties. Bitcoin, since its inception in 2008, has never had its ledger compromised. Indeed, the Bitcoin ledger secures over $100 billion dollars of value right now.

Smart Contracts: This type of contract allows for the distribution and collection of digital or digitalized assets. There is no need for a middleman at all. The easy way to think about smart contracts is that they are similar to vending machines. If a certain condition is met, then a predetermined outcome is executed. With a vending machine, if you put $1 into the machine you then get a can of coke. Smart contracts act in a similar way and can be customized to meet business needs. Theoretically, anything of value can be traded via a smart contract.

Transaction inefficiencies in global supply chains

The truth is that there have been no major updates in transaction infrastructure for decades. Global payments can take days to be validated, expensive currency exchange is often required to settle operational expenses across the global supply chain, and banking fees can be extortionate.

The key point is that the current global infrastructure to transfer value has significant room for improvement. This is something cryptocurrencies can help with. In June 2018, the popular cryptocurrency, Litecoin, was used to transfer $99 million worth of value. How long did this take and how much did it cost? Well, the transaction took a few minutes to validate and the sender was charged $0.44 in fees. We challenge you to find a traditional method of transacting value that can achieve the same results at a cheaper price.

Fast and cheap payment validation not only means the pace of business can be faster, but it gives corporations a significantly cheaper payment alternative to keep their supply chains running smoothly.

Supply chain automation

From a business perspective, the main issues with supply chain management are human error in documentation, the number of people required to keep the supply chain running smoothly, and the cost of import/export compliance in different countries.

Smart contracts give companies the opportunity to automate their whole supply chain. How would this work? Let’s imagine we run the ‘Awesome Car Company’ and have a supply chain that requires shipments and payments to a dozen different countries. We must be aware that many of these countries have different importation and exportation regulations for us to comply with.

The UK distributor of the ‘Awesome Car Company’ has sold some units. Their inventory is now down to 9 units and has triggered the smart contract low stock rule (the smart contract executes when inventory is below 10 units). This means the rest of the smart contract deploys and automatically issues contracts for car parts from each supplier in our supply chain, which are securely stored on the blockchain.

Issuing contracts for each supplier is not enough to get our new car units. Suppliers need to be paid. Smart contracts can also be used to automate payments to all our suppliers in cryptocurrency. Automated cryptocurrency payments can be processed from the distributor in the UK to the head company and then to all the suppliers in our supply chain.

Shipping and customs documentation from the suppliers can be instantly generated, with each country’s regulations taken into account. These documents can then be sent securely to the UK distributor of the Awesome Car Company. In essence, our whole supply chain is automated through smart contracts and the UK distributor of the Awesome Car Company can just sit back and wait for his new car units to arrive. The CEO of the UK distributor can now significantly reduce payroll and increase their margin on each car unit sold.

Blockchain can help solve global counterfeiting issues

According to the International Chamber of Commerce, counterfeiting could cost the global economy $1.9 trillion a year by 2022. This just shows the scale of the counterfeiting problem for international businesses and the drain it imposes on the global economy.

The good news is that there are cryptocurrency projects focusing on securing global supply chains from counterfeiters. One such project is China-based Wabi. Wabi provides a solution to track products through every step of the supply chain, from the manufacturer to the shop shelf.

When the product is manufactured, it is secured by an RFID label. These have been specifically developed to resist accidentally breaking in transit or tampering. These labels are then scanned at every stage of the product’s journey through the supply chain. Data such as the product’s geographic location is stored on the blockchain.

Data stored on the blockchain cannot be altered or edited, meaning that records stored cannot be altered by nefarious actors.

Wabi also has a consumer app. When a customer is in a shop and they come across a Wabi protected product, they scan the RFID label in the app and all the supply chain data can be viewed. If the product’s physical location on the store shelf does not reconcile with the information on the blockchain, then the customer will be alerted that the product has likely been tampered with. In short, the product is not where it should be, meaning that the supply chain has been compromised.

This technology gives customers assurance that what they are buying is the genuine product from the manufacturer. It’s not just about saving corporations money. In 2004 and 2008, the Chinese baby milk supply chain was compromised and counterfeit products hit the shelves of shops. This resulted in:

• 2004: 63 infant deaths
• 2008: 6 infant deaths and 300,000 hospitalizations

The impact of global counterfeiting is not just an economic problem. It is a problem that costs lives, and that is why adoption of blockchain technology can add very real value to securing global supply chains.

The full potential of cryptocurrency is still to be seen

Before we get too excited, we must remember that cryptocurrency is still far away from being widely adopted at a merchant and institutional level. Indeed, cryptocurrency as a store and transfer of value may have no place at all in international business.

However, Tim Draper’s comments that cryptocurrency is bigger than the Industrial Revolution could be spot on when it comes to the potential impact that blockchain and smart contract technology can have on international business.

The potential to create a new economy is certainly there. Some may think similar things were said in the dotcom bubble and other bubbles of the past. But consider what you are using to read this article. Maybe the supporters of online business during the dotcom bubble got something right after all?

Technological advancements and adoption take time. But if cryptocurrency can actually bring wide sweeping changes to international business, I believe that it will be blockchain and smart contract technology that will change everything and usher in a new global economy.

The post How could cryptocurrency impact global supply chains? appeared first on Trade Ready.

After years of skepticism about their security, value, and staying power, it seems that cryptocurrencies like Bitcoin are ready to take on the world markets. There’s serious speculation that central banks will begin to hold cryptocurrencies in 2018. Investment firms such as Goldman Sachs have released information to clients about investing in Bitcoin, and CBOE Holdings has begun to sell Bitcoin futures.

This means the time has come for those in international business to look at how Bitcoin and other cryptocurrencies will affect global finance.

Cryptocurrencies are now predicted to disrupt the way people do business, and those buying and selling across borders stand to benefit.

The basics of cryptocurrency

Put simply, cryptocurrency is a digital financial exchange for goods and services, but cryptocurrencies like Bitcoin are so much more complex.

Bitcoin can be purchased as a basic money exchange and then used as currency. Every time money is exchanged through Bitcoin or a similar cryptocurrency, that transaction is recorded in a detailed public ledger. The ledger forms a long chain of verified transactions in chronological ordered. These ledgers are referred to as blockchains, and the blockchains are a big part of what excites people about the possibilities opened up by cryptocurrencies.

The benefits of cryptocurrency for international trade

For those buying and selling goods and services across borders, cryptocurrency offers a host of benefits. Some of the cryptocurrency and blockchain technology are poised to disrupt trade finance include:

• A lack of exchange rate. If you’re dealing with many international suppliers and buyers in a variety of countries, you have to deal with a myriad of exchange rates. If everyone is using Bitcoin, however, you’re all dealing in the same currency with the same value, without the constant hassle of monetary exchange.
• Fast money movement. Cryptocurrency transactions are near instantaneous. The transfer itself posts immediately, and it takes only about 10 minutes for payments to be validated in the blockchain.
• Secured payments. The money you receive when you take a Bitcoin payment is also secure. Users need to have the money available upfront, so there’s no chance of payments bouncing or credit transactions being canceled.
• Lower taxes and fees. Because cryptocurrency is a peer-to-peer monetary system, there are no taxes that govern them, and transaction fees are almost nonexistent.
• Detailed records. The blockchains created from cryptocurrency transactions create clear, secure records that can be tracked and verified. There’s talk of tying contracts and shipments to transactions within the blockchain to make business and logistics easier to track. With blockchain technology backed by cryptocurrency, processes could become more efficient, easier, and transparent. In fact, companies are so interested in the possibilities of blockchain technology that Danish shipper Maersk has partneredwith IBM to pilot a blockchain shipment-tracking system.

The drawbacks of cryptocurrencies

Of course, there are drawbacks to cryptocurrency that have slowed its adoption. First and foremost, the future of cryptocurrencies remains uncertain. While a single Bitcoin is now more valuable than an ounce of gold, economist and financial heads warn that cryptocurrency is another trend that will result in a burst bubble. From a daily user standpoint, there are problems with cryptocurrency as well. Bitcoin isn’t legal in all countries, and therefore can’t be used everywhere. And because users must have the cash on hand to make purchases, buying on credit — which businesses often do — isn’t yet a possibility.

The future of Bitcoin in international trade

While many are debating the future of Bitcoin as a tech bubble versus a viable long-term currency, it’s likely at least some of the technology created by Bitcoin is here to stay. From quick transfers to the thorough records created by blockchains, businesses and institutions are looking at how they can use cryptocurrency and related technologies to make doing business easier and cheaper.

Regardless of how the future pans out for cryptocurrencies, it’s clear that savvy business owners should be exploring cryptocurrency and blockchain technologies to see how they could benefit and make a move to capitalize on the technology.

The post How Bitcoin could shake up international trade appeared first on Trade Ready.

What should you look out for or expect in the international business world in 2018? Let’s take a look and see what could be dominating the headlines you read over the next twelve months.

1. The CPTPP

Though President Trump withdrew the U.S. from the TPP in January, the remaining 11 countries are working to resurrect the deal as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This deal, if signed, would eliminate approximately 95% of tariffs on trade between these countries, who have a combined GDP of over $10 trillion USD.

In November, Canada surprised the other 10 countries by declining to sign the agreement, to the surprise of the negotiators and the Canadian international trade community. However, amid efforts to diversify exports beyond the American market, it seems unlikely that Canada will continue to drag its heels on an opportunity to gain preferential access to the Japanese market in particular. Expect any final issues to be resolved and the CPTPP to be signed sometime in 2018.

2. Ongoing, contentious Brexit talks

By December 2017, the UK has completed the first phase of Brexit negotiations with the EU, covering issues such as the Irish border, citizens’ rights and financial settlements. The second phase of negotiations will cover the UK’s transition period after formally leaving the EU in March 2019. Discussions over the long-term relationship between the UK and EU will be included in phase three.

This process was complicated on December 13, when several Conservative British MPs joined the opposition to vote for an amendment requiring British Parliament to debate and vote on any final deal with the EU before it can be approved.

The second phase of Brexit negotiations are planned for 2018, and are expected to present few greater challenges than the first phase. The final phase on the long-term relationship between the UK and EU, however, presents several important questions about economic integration and free trade that Britain’s politicians and citizens have not yet agreed upon.

With two sets of challenging negotiations, and the extra hurdle of parliamentary approval, the odds that talks will drag into the final three months before the UK leaves the EU on March 29, 2019 remain high.

3. Sustainable, cleantech exports

If you’re involved in the clean tech and sustainability sector, 2018 should be a strong year for you. Despite the U.S. withdrawal from the Paris Agreement, global regulations are still trending towards stricter environmental and emissions regulations, requiring businesses to invest in cleaner technology in order to meet those standards. According to EDC President and CEO Benoit Daignault, total global investment in cleantech has now exceeded $1 trillion and will reach $2.5 trillion by 2020.

Canada in particular is placing great emphasis on this industry. The Canadian government promised $1 billion towards clean tech in its 2017 budget for R&D. The Trade Commissioner Service is also hiring 15 new Trade Commissioners to focus specifically on cleantech.

4. India, Brazil, and New Zealand – the rising stars of global trade

If you’re looking for new markets over the next 12 months, Morgan Stanley recommends you take a hard look at India. They argue the country’s increased digitization, new tax laws and younger demographics present a bright future, and predict 7.5% GDP growth in 2018. Morgan Stanley also predicts that India will be the world’s fastest growing economy over the coming decade.

Brazil will also see a quick recession recovery, growing an expected by 3.1% in 2018, according to the Brazilian government.

If you’re more interested in fully developed markets, Forbes ranked New Zealand second on its 2018 Best Countries for Doing Business rankings, citing its 3.6% economic growth in 2017, among other factors. The country also ranked highly in several categories for ease of doing business, including first in IP rights, bureaucracy/red tape levels surrounding business, and Transparency International’s Corruption Perception Index.

5. Meaningful action to reduce oil dependency

As Venezuela continues to suffer through the collapse of its oil-dependent economy, and the U.S. plans to become a net exporter of oil within 10 years, several oil-dependent economies are taking steps to diversify their economies.

In Russia, Putin’s approval levels are dropping as the economy struggles through lower oil revenues. Despite making fiscal changes to reduce the national budget’s dependence on oil revenues, he may push for new measures to improve his chances in the country’s 2018 presidential elections.

Saudi Arabia has plans to sell about 5% of Saudi Aramco, the state-owned oil company, through an IPO in 2018 and expects to generate up to $100 billion for the country’s Vision 2030 program, designed to shift the Saudi economy away from oil dependency towards tech and entertainment services.

Nigeria and Angola, meanwhile, are looking to agriculture to reduce their oil dependency issues. Nigeria, dependent on oil for 70% of government revenues, has launched a new program to increase yam exports to Europe and the U.S., as the country produces 60% of the world’s yams. Angola are instead focused on a broader approach to tap into their agricultural potential, which includes producing more cereals, milk, chicken, cassava, and other products.

6. Banks taking on blockchain

It is practically impossible these days to tune into the business or financial news and not hear a story about the latest blockchain or cryptocurrency development. Blockchain technology, allowing multiple players to have access to a live, unalterable digital ledger, offers game-changing possibilities for international trade finance. In 2018 this buzzworthy fintech is moving beyond Silicon Valley start-ups, into the mainstream world of global financial institutions.

In March, 2017, we reported on how banks were working to bring the advantages of blockchain technology to their corporate clients. In May, the R3 Consortium, made up of of 70 of the world’s biggest financial institutions and created to research and develop blockchain adoption, announced it had secured its largest ever investment. Then in October 2017, seven major banks partnered with R3 and Finastra to develop a blockchain-based marketplace for syndicated loans. On December 6, Amazon joined the blockchain party, announcing a partnership with R3 to allow the Corda platform to be the first distributed ledger technology to operate on the Amazon Web Services Platform.

What will we see in 2018? Swiss global financial company UBS has led an initiative to create a “utility settlement coin” that would represent each major national currency. If this coin is launched, the Corda platform could be adapted to facilitate its use.

IBM is working on launching their own blockchain platform that would allow banks to rapidly clear global payment transactions. There are also several start-ups working on digitizing the bill of lading process.

2018 could be the year some of the blockchain-based payment initiatives move from development to adoption.

7. Adoption of futuristic supply chain technology

Machine learning, automation and robotics, self-driving vehicles, new tracking technology – all of these futuristic supply chain tools will see major developments and implementation in 2018.

The past year was a big one for self-driving vehicles, culminating with the reveal of Tesla’s new fully electric semi, gaining pre-orders from big players such as PepsiCo, UPS and Walmart. Companies invested over $1 billion into self-driving and other trucking technologies in 2017.

Speaking of investing in supply chain technology, over $4 billion was invested in AI by U.S. venture capitalists in the past year. One application that has seen immediate return for companies adopting machine learning capable AI is Multi-Echelon Inventory Optimization (MEIO), which has been shown to reduce inventories by 30% while maintaining or improving customer fill rates.

Robots will also continue to play more of a role in warehouses in 2018. While some are increasingly capable of working independently, replacing human workers on the floor, others are working alongside humans, or being controlled by humans using VR applications. There’s no doubt that the demand for the skills needed to work with robotics will continue to rise in the year ahead.

8. Planning for the possibility of a world without NAFTA

The sixth round of NAFTA talks is set to kick off in Montreal January 23. But as the negotiations near, there doesn’t seem to be a lot of positivity. The first five rounds reportedly saw very little progress, putting even more pressure on this next round.

What’s the problem? The U.S. is seemingly immovable on five issues that pose major problems for the agreement’s other two member countries, Canada and Mexico.

The five issues include:

• Removal of reciprocity in government procurement at the sub-national level
• Changes to the rules of origin in the auto sector
• Elimination of the independent dispute resolution clause
• End of Canadian supply management of the dairy, eggs and poultry industries
• Addition of a “sunset clause” on NAFTA itself

“NAFTA, by itself, will not collapse,” said Mexico’s Economy Minister ldefonso Guajardo in October, but even if Mr. Guajardo is right, it may change drastically from what we have in place today.

If this really does spell the end of NAFTA, the Canadian auto, pulp and paper, chemicals, mining, aerospace and oil and gas industries are likely to be most affected, according to BMO chief economist Douglas Porter.

Even without NAFTA, trade between the three nations is inevitable. Supply chains between Canada and Mexico criss-cross the U.S. How businesses adapt to the realities of a new – or non-existent – NAFTA, is something we’ll be watching closely in 2018.

9. Cyber threats and IP risks

As technology gets more sophisticated and ingrained in our work and personal lives, so too does the threat of cyber security breaches, which in turn compromises our intellectual property. Sixty-four percent of companies surveyed reported some experience of web-based attacks in the past year. Companies of all sizes are targeted and face the risk of cyber threats from simply being connected to the internet. And the costs are large – the average cost of a data breach in Canada is a jaw-dropping $6.03M.

So what types of threats are growing in 2018? Phishing, social engineering attacks, malicious code, botnets, denial of service attacks and ransomeware are all on the rise.

Ransomware in particular is growing in frequency, attacks rose an alarming 50% in 2016. Demonstrative of the damage a ransomeware attack can cause was the aftermath of the WannaCry attack in May 2017. Hundreds of thousands of individuals lost access to their data, compromising intellectual property, private customer information, and disrupting commercial processes.

As a business, it has never been more crucial to include cybersecurity programs directly in your strategy, and engage IT professionals to help cover all aspects of your web-based properties.

10. Demand for global trade skills higher than ever

Despite continuing turmoil and uncertainty on the global political stage, Canadian businesses still hold an optimistic outlook about their export opportunities. According to Export Development Canada’s Fall 2017 Survey, the majority of respondents believe that export sales will increase in 2018, citing new opportunities, growing demand, and expansion into new markets as stimulating factors.

As more businesses of all sizes get involved in international markets, the demand for talent skilled in global trade processes, is also growing.

“We hear from exporters all the time that knowledge is one of the most important tools for building international success,” said EDC Senior VP, Business Development Mairead Lavery.

In 2017, the FITTskills international trade training program underwent a major update, including the addition of 60% new content to reflect the changes we’ve seen in technology, ecommerce, trade agreements and more. In October, FITT also partnered with EDC to expand access to the available resources for businesses of all sizes looking to take advantage of international opportunities.

There’s no doubt that we all face an exciting year ahead, full of innovation, an ever-shifting global political environment, and risks, alongside ample new opportunities for business growth.

What trends will you be watching in 2018?

The post 10 global trade trends we’ll be watching in 2018 appeared first on Trade Ready.

Blockchain is on everyone’s lips these days – nowhere more so than in the trade finance world. This technology has the potential to clamp down on fraud, streamline supply chains, and enhance companies’ liquidity. As the prime facilitators of trade, banks are as eager as any to bring the benefits to their corporate clients.

Making blockchain a reality, however, will take time and require a practical approach. Banks will have to identify targeted “use cases” – determining exactly how and where blockchain can bring improvements.

Strong collaboration between financial institutions and technology firms will be needed to bridge technical gaps, while success will depend on agreeing common standards and frameworks.

Back to basics: how blockchain works

Blockchain technology relies on a “distributed ledger” – a cache of digital information to which all users of a certain computer network have shared access.

As stages 1 & 2 of the diagram show, any addition to this record – created by a new trade or transaction – is logged as a “block” of data. All members of the network are notified of this action (stage 3), and at least one of the members must accept the change as valid (stage 4).  Once verified, this new block is “chained” to the previous blocks of data (stage 5).

Bulking up security in trade

This authenticated data chain results in high degrees of transparency and security most welcome in the trade industry. The ledger is visible and accessible (i.e. “distributed”) to all counterparties involved in trade – whether banks, buyers, sellers, shipping companies, insurers, forwarders, customs officers, inspection bureaus or regulators. Should a new transaction be attempted, this entire network must first accept any modification to the chain as legitimate.

Blockchain could thus form a key ally for banks in their fight against fraud. Banks must always be on the lookout for the risk of “double-financing”, for example – the chance that another bank has already been allocated the trade’s receivable, or that another transaction is already using the invoice presented for financing as collateral. The permanent and essentially tamper-proof record offered by blockchain would mitigate this threat.

Blockchain facilitates automation and risk mitigation

Yet the advantages do not stop there.

The distributed ledger would offer a bank comprehensive and real-time insights into its corporate customer’s entire supply chain – from the initial order of purchase, to assembly, inventory, payment and final delivery.

Without having to spend time and resources on manually processing and matching data, the bank could more efficiently identify positions in the supply chain where risk mitigation and financing are needed. Funds could be released in a timelier manner, and the risk of non-payment would be eliminated, enhancing  with the company’s liquidity as a result.

“Smart contracts” represent another exciting prospect of blockchain. These contracts are designed to carry out pre-defined actions automatically when set off by a particular event in the supply chain. For example, once the delivery of goods to an importer has been effected, a smart contract would ensure that funds are automatically released to the exporter.

At Commerzbank, we’ve already used the underlying concept of the smart contract when facilitating trade with the Bank Payment Obligation (BPO). The BPO is a new trade finance instrument positioned between open account and the letter of credit. It provides payment assurance on the automatic exchange and matching of digital trade data – without presentation of paper documents – to complete a transaction.

The journey to blockchain is far from straightforward

The application of the smart contract idea is certainly an important step towards realising the full potential of blockchain in trade. But a range of challenges will be met along the way.

For a start, banks must establish exactly how distributed ledgers can enhance their corporate customers’ trade. Whether they want to speed up provision of financing, improve a customer’s working capital, or mitigate payment risk, banks will need to identify the right use cases for blockchain, and find exactly where new solutions are needed. This will be much more productive than merely attempting to replace tried-and-tested trade solutions, such as the letter of credit or guarantee, with an alternative based on the distributed ledger.

There will also be technical challenges to overcome. Banks and companies will need to invest resources into developing blockchain’s digital interfaces, spend time getting to grips with the technology, and ensure that data security in their blockchain systems is up to scratch. They will also have to agree to standards that can ensure that the software underpinning new blockchain processes will work with legacy systems.

Meanwhile, the trade finance industry will require crucial harmonisation when it comes to offering and using blockchain platforms.

The standout advantage of blockchain is its interconnectivity. This would be wasted if different trade finance parties used various distributed ledger technologies, underpinned by incompatible systems.

Collaboration will be the key to integration

Progress, therefore, will rely on the banks, technology providers and all other stakeholders in the complex trade finance ecosystem being able to work together. They must not only agree to set standards, but also to share insights and useful experiences.

It is for this reason that the R3 consortium, a group of more than 70 financial institutions including Commerzbank, are committed to the research and development of distributed ledger technology. The Euro Banking Authority Working Group for Cryptotechnology for Trade Finance is another group which seeks to explore use cases for blockchain for corporate customers.

Blockchain has the true potential to enrich companies’ trade – but success will take time, collaboration, and hard work from the banks.

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