According to research conducted by trade finance data supplier, Coriolis Technologies, SMEs across the UK are missing out on opportunities due to politics as opposed to economics.
The report revealed that trade wars and political tensions between the UK and other countries is causing more of an adverse effect on how banks are lending rather than financial risks.
The report said;
“Banks and payments systems are exposed to sanctions and tariff regimes through the supply chains of their clients: large corporates are moving their supply chains around to manage the risks of higher costs of tariffs or the imposition of sanctions,
“This is an additional hurdle for banks which makes trade finance risky. Banks have the potential to stay ahead of the game through big data, artificial intelligence and machine learning: new technologies have the potential to reduce costs, ease due diligence and provide a more tailored service to smaller clients.
“However, banks are challenged by legacy systems that make upgrading their systems to compete with non-banks to provide services to SMEs cumbersome and expensive.”
Chief executive of Coriolis Technologies, Rebecca Harding believes that the lack of political ownership during the aftermath of the financial crisis which has caused a surge of populism and ultimately economic nationalism and trade wars.
“Coupled with the clampdown on financial institutions, there has been a ‘perfect storm’ for SMEs globally, who have been starved of the funding they need to trade and grow over the last decade.
“The tit for tat approach to the imposition of sanctions and trade tariffs has served to further stifle small business growth and contributing to the rapid erosion of international relations, on the global stage.”