Oracle has launched new cloud-based trade and supply chain finance (SCF) services designed to help banks accelerate lending to corporate clients and small and medium-sized enterprises (SMEs).

This comes as Oracle shares soared to a record high yesterday: in addition to new trade finance services, the database giant announced a $30 billion cloud computing contract designed to modernise an industry plagued by paper-based processes that reject 45% of financing requests.

Its Oracle Trade Finance and Supply Chain Finance cloud services would enable banks to provide faster access to capital through automated processes and digital self-service capabilities.

Legacy systems complicate trade financing for banks, contributing to a well-established $2.5 trillion gap in global trade finance, equivalent to 10% of worldwide merchandise trade.

“Trade finance and supply chain finance demand a resilient and agile technology foundation, one that can adapt to the inherent volatility of global commerce,” said Sovan Shatpathy, senior vice president of product management and development at Oracle Financial Services.

Oracle’s trade finance service enables banks to manage operations across multiple geographies and currencies, whilst the SCF platform handles the full lifecycle of receivables and payables financing, offering both supplier-centric and buyer-centric options.

The cloud services incorporate machine learning capabilities that can automatically extract data from scanned invoices, potentially reducing processing time and effort by up to 70%, according to Oracle. The platforms also feature automated know your customer (KYC) checks and real-time reconciliation engines.

The launch reflects growing demand from banks for more flexible and cost-efficient SCF platforms as they face operational constraints and pressure to reduce costs. According to the World Trade Organization (WTO), 80 to 90% of world trade relies on some form of trade finance, yet the sector suffers from limited collaboration between fragmented legacy systems and poor user experiences with minimal self-service capabilities.

SCF has become increasingly important for companies seeking to optimise working capital and cash flow, particularly amidst a volatile global trade ecosystem. The financing method allows companies to extend payment terms with suppliers whilst enabling those suppliers to receive early payment at discounted rates through bank financing.

Oracle’s entry into this market puts it in competition with established financial technology providers and traditional banking software companies, as demand for digitised trade finance solutions is only projected to grow.