Career story: getting into trade finance

13 November, 2023Ouida Taaffe

The London Institute of Banking & Finance talks to Mohamed Abdulhameed Aryan, Head of Trade Product at the National Bank of Bahrain about his career in trade finance, how he studied alongside his work, and how he sees the sector developing.

How did you get into trade finance?

Though I had a background in finance, I had very little knowledge of trade finance. IMohamed Aryan knew there was something called export and import finance, but I’d never heard of a letter of credit, I didn’t know what a bank guarantee was. All of that was new to me.

I was selected for the graduate training programme and one of the training rotations was in trade finance. There, I was given certain textbooks to read. This is around twenty years ago. My first reaction was ‘oh no, I don’t think I’m going to like this’, and here I still am after 20 years.

What made you think ‘this is for me’, despite the slightly bumpy start?

Trade finance is not your routine kind of a job. Even at that time, in 2003, when the products were still quite traditional, such as straightforward letters of credit and documentary collection, each one of them had a different process, a different exposure treatment and different credit risk element. That in itself was interesting because you really got an introduction into how companies finance their working capital needs.

Is there any one aspect of your role that particularly appealed to you?

We were one of the very few departments communicating directly with corporate clients. Customer service itself is something I find satisfying, but you also learn from clients. For example, how do they make orders, and finance those orders? That made it much more interesting to me than a more procedural role. You see how banks really assist companies and you have a sense of achievement when you see a company succeed.

How have you juggled studying for professional exams alongside a full-time career?

I was always interested in obtaining professional qualifications – though during the first few years I had no idea there were professional exams in trade finance. I found out about the Certificate for Documentary Credit Specialists (CDCS) on Google. The Bahrain Institute of Banking and Finance, which has a partnership with LIBF, started prep courses trade finance qualifications in 2012. And this encouraged me to study along with my peers from the same industry.

What really helps is that you're studying topics you’re able apply in your day-to-day work and you can relate to many of the topics discussed in the text. So, it was a very interesting experience.

What advice would give to someone looking at a career in trade finance?
Getting to know others in the sector, and networking, opens up a lot – just in terms of your interest in the field. And having qualified people is important. In Bahrain, for example, we’re now members of the International Chamber of Commerce and we have advisory committees in the local chapter here. We’re in the process of getting final approval from the government to apply the ICC’s guidelines on uniform rules for demand guarantees (URDGs), which we expect to be very helpful in developing industry and trade as the URDGs help to ensure that all stakeholders in a transaction benefit from it.

What are some of the challenges?

Business awareness is still a challenge. There is always a need to educate clients. When you're dealing with corporates, they have at least minimum knowledge but, when it comes to SMEs, that’s harder even though there are options that can really help them. I'm studying now for the certificate in supply chain finance (CSCF), for example. Supply chain finance can work very well in optimising an SME’s working capital, but they are not aware of it.

What about sustainability and the role of trade finance in that?

We're working to develop a framework in the institution where I work, looking into how we can do trade finance on the basis of certain ESG criteria. So, for example, when a client scores well on the ESG scorecard, they might get better pricing for their letter of credit, or for their guarantees. Levels of awareness and demand from clients is still mixed, but sustainable finance is something that will have to happen going forward and that could be even become mandatory.

What other trends do you see that people should be thinking about?

Well, digitalisation is an obvious one. I see a lot of developments within banks and a focus on digital trade. But it requires a lot of investment and systems and people. Digital trade, along with supply chain finance and sustainable trade finance, all these combined are the future of trade finance.

Trade is something that will always be there. No single country is self-sufficient. There will always be a need for trade finance and banks will always be there to support global and domestic trade. It will change and evolve, there’s a lot happening in this field – but it's interesting.

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