According to the research report titled ‘Global Financial Guarantee Market Size study, by Product (Bank Guarantees, Documentary Letter of Credit, Standby Letter of Credit (SBLC), Receivables Financing, and Others), by Enterprise Size (Small Enterprises, Medium-sized Enterprises, and Large Enterprises), by End User (Exporters and Importers) and Regional Forecasts 2021-2027’, available with MarketStudyReport, global financial guarantee market was worth USD 28.7 billion in 2020 and is estimated to reach a valuation of USD 54.5 billion by the end of forecast period 2021-2027, growing at a CAGR of 9.6% throughout.
 

As per the report findings, factors such as surging product adoption by SMEs, and increasing import and export activities across various countries are acting as a major impetus to global financial guarantee market growth.
 

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For the unversed, a financial guarantee is an irrevocable indemnity. It is a bond backed by a secure financial institution and equips investors with a guarantee for secure settlement of funds, and interest amounts promised within a contract.
 

As per U.K. Finance, unauthorized financial fraud losses across remote banking, payment cards, and cheques totaled approximately USD 942.73 million in 2019, while members reported 122,437 incidents of Authorized Push Payment (APP) frauds during the year. Thus, constantly rising financial risks are likely to elevate product demand in the upcoming years.
 

Despite the positive outlook, high collateral requirements by banks while providing these services are expected to stymie industry growth over 2021-2027.
 

From a regional frame of reference, the report on global financial guarantee market spans across Asia Pacific, Europe, North America, and Latin America. Among these, Asia Pacific currently captures a major market share, owing to increasing financial risks and rising awareness about less processed documentation and guarantees.
 

Meanwhile, Asia-Pacific market is poised to witness a substantial growth rate over the forecast period on the back of increasing adoption of online money transactions by various SMEs, and rising digitalization in banking sector.
 

Prominent players in worldwide financial guarantee industry include Bank of Nova Scotia, Sinosure, National Bank of Canada, Industrial and Commercial Bank of China Ltd. (ICBC), HSBC Holdings plc, Citigroup Inc. (Citibank), Bank of Montreal, Barclays plc, BNP Paribas S.A., and Asian Development Bank (ADB).