The global trade finance gap is widely described as a risk problem. Banks decline transactions because counterparties are uncertain, regulations have tightened, and global supply chains have grown increasingly difficult to assess.
But what if the evidence points to a different bottleneck?
The Evidence Behind the Gap
The Asian Development Bank's Global Trade Finance Gap Survey — now in its ninth edition, drawing on data and responses from more than 110 trade finance providers collected during 2023–2025 — puts the persistent shortfall at $2.5 trillion, roughly 10% of global trade. The gap has not narrowed since 2023, and has grown substantially since 2015, when it stood at $1.5 trillion.
That last point is where the risk narrative gets complicated. The ICC Trade Register 2025 — the industry's benchmark dataset, compiled with Boston Consulting Group and Global Credit Data, covering more than 47 million transactions worth $23 trillion reported by 26 banks — puts default rates for trade finance instruments below 0.3%. Letters of credit and supply chain finance payables rank among the lowest-risk products in any asset class.
If default risk is already this well contained, a $2.5 trillion gap becomes harder to explain as simple risk aversion. The challenge is not primarily identifying risk. It is economically verifying the information needed before risk can even be assessed.
Verification Gets Harder Where Supply Chains Become Invisible
Most trade finance underwriting reaches confidently only as far as Tier 1 — a lender's direct counterparty. Tier 2 and Tier 3 suppliers, further down the same supply chain, are where visibility consistently breaks down — and where several independent studies converge on the same finding, even where their exact numbers differ.
Deloitte's CPO survey found that only 15% of procurement leaders have visibility beyond their Tier 1 suppliers. Sphera, which tracks supply chain risk events, estimates that as much as 85% of supply chain risk originates in exactly these deeper, less visible tiers. McKinsey's Supply Chain Risk Pulse 2025 puts a similar gap in more conservative terms: only 42% of companies report meaningful multi-tier visibility beyond their direct suppliers. The three studies measure different things, from different angles — but they describe the same structural blind spot.
A Structural Conflict, Not a Technical Failure
It is tempting to treat this as a data problem — as if better software would simply reveal what is currently hidden. But a more consistent explanation runs through the research: buyers and Tier 1 suppliers often have a legitimate commercial reason not to disclose who sits further down their supply chain. Naming a Tier 2 relationship can expose that supplier, or the buyer's own margins, to competitors — and hand the supplier itself more direct negotiating leverage.
Seen this way, the visibility gap isn't a technology failure waiting for a fix. It's a rational response to a structural conflict of interest.
If verification — not risk assessment — is increasingly the binding economic constraint on trade finance, then innovation may need to focus on verification itself, rather than on more sophisticated ways of pricing a risk that was never, by the evidence above, poorly understood to begin with.
The Research Question
This question is explored in Monaco Trade Forum Research Publication No. 001. The publication examines whether financing-critical supplier facts could be verified without requiring companies to disclose commercially sensitive supply chain relationships, using privacy-preserving cryptographic attestations.
If public evidence increasingly suggests that verification economics — not simply risk appetite — constrain trade finance, the next generation of innovation should begin by asking a different question. Not how to predict risk more accurately. But how to verify financing-critical facts more efficiently.
Research Publication No. 001 explores that question in greater depth →