Cross-border financing in Asia is scaling but execution remains uneven. Demand is expanding across infrastructure development, energy transition and supply chain reconfiguration, while capital is available across global banks, institutional investors and development finance institutions. Activity is increasing across markets and sectors, but deployment is not keeping pace.

Infrastructure investment alone is expected to exceed $100 trillion globally through 2040, with Asia accounting for a significant share. At the same time, ASEAN attracts about 15% to 17% of global foreign direct investment, supported by manufacturing relocation, domestic consumption and regional integration. These flows are generating sustained demand for financing across multiple sectors and markets.

Where opportunity sits

Banks are building capabilities to support this expansion across transaction banking, project financing, structured trade and sustainable finance. Belinda Han, head of transaction banking Asia Pacific at MUFG, said that clients operating across markets expect “consistent structures and delivery across jurisdictions”. Ankur Kanwar, head of transaction banking and cash management, Singapore and ASEAN, and global head of payment and treasury solutions at Standard Chartered, pointed to the growth of intra-Asia flows, noting that the China–ASEAN corridor has “already exceeded $1 trillion”. These developments reflect how financing demand is increasingly driven by cross-border corporate activity.

At the execution level, financing depends on how transactions are structured and how risks are allocated across participants. Steve Mercieca, head of infrastructure and development financing at Standard Chartered, noted that projects continue to be “developed and financed individually”, with structures built around each asset. Anand Jha, head of trade finance and lending, Asia Pacific and Middle East at Deutsche Bank, described how financing in frontier markets is organised around trade flows and risk-sharing across banks, insurers and multilateral institutions. Michael Wen, executive vice president, corporate finance products at Cathay United Bank, explained that underwriting, syndication and distribution are used to allocate exposure across multiple participants.

Ankur Kanwar, Head of Transaction Banking and Cash Management, Singapore and ASEAN, and Global Head of Payment and Treasury Solutions, Standard Chartered

Steve Mercieca, Head of Infrastructure and Development Financing, Standard Chartered

What actually works in practice

Cross-border financing is delivered through a set of interconnected activities covering origination, flows, structuring and capital distribution. Each activity is handled by different institutions and combined at the transaction level, depending on the requirements of the deal and the markets involved.

Platform coordination provides the foundation for activity. At MUFG, transaction banking operates across 18 markets and is supported by partner banks such as Bank Danamon, Krungsri, Security Bank and VietinBank. Han said that clients expect “consistent structures, terms and experience across the region”, adding that delivery needs to “feel the same regardless of which market they operate in”. MUFG reported overseas loans of JPY 53.1 trillion ($364 billion) and Asia Pacific profit of about JPY 500 billion ($3.4 billion). In practice, domestic clearing systems, partner bank balance sheets and regional coordination are combined to deliver payments, trade finance and liquidity through a single framework.

Transaction flows and treasury management sit at the core of cross-border activity. At Standard Chartered, corporates operate across multiple ASEAN markets, managing payments, collections and liquidity through integrated structures. Kanwar said that flows are “increasingly multi-directional”, reflecting how corporates are “operating across several markets at the same time”. Treasury is often centralised in Singapore while operating accounts are maintained locally, with multi-currency cash pooling, cross-border sweeping and foreign exchange hedging used to manage liquidity and currency exposure.

Origination begins with corporate expansion and investment flows. At UOB, cross-border activity is generated by advising corporates on market entry, connecting them to local partners and supporting expansion into regional markets. This positions the bank at the point where investment decisions are made, linking client expansion to subsequent flows in payments, trade and financing demand.

Jimmy Koh, who heads network partnerships and strategic marketing within UOB’s foreign direct investment advisory business, said that engagement begins “well before formal banking requirements emerge”, focusing on connecting companies to government agencies, industrial ecosystems and partners as they assess market entry. This reflects how origination is increasingly shaped upstream, where the challenge is not financing but navigating regulatory environments, identifying partners and building operating presence.

Infrastructure financing is driven by projects and financial sponsors. Mercieca described activity across offshore wind in South Korea and Taiwan, renewable energy in Indonesia and the Philippines, and public-private partnership hospitals in Australia, noting that projects continue to be “developed and financed individually rather than as a standardised pipeline”. Projects are structured with sponsor equity and long-term debt, supported by power purchase agreements, concession contracts or availability-based revenue models. Financial sponsors and institutional capital providers, including global asset managers such as Blackstone, originate projects, structure capital and anchor transactions, with banks arranging financing around these sponsor-led structures.

Structuring and distribution determine how capital is deployed. At Cathay United Bank, financing is organised through underwriting, syndication and distribution. Wen said that the role of the lead bank is to “underwrite first, then bring in other lenders and distribute the risk”, allowing exposure to be shared across participants. Guarantees and credit enhancements are used to bridge differences in credit quality, currency and regulatory requirements, while layered structures combine commercial lending with development finance participation. This allows exposure to be transferred and balance sheet capacity to be reused.

Frontier market financing is organised around trade execution. At Deutsche Bank, transactions are structured using letters of credit, guarantees and short-term trade facilities. Jha said that financing requires “working with multiple parties to allocate different types of risk”, with local banks, multilateral institutions and global banks each taking specific roles. Transactions are typically self-liquidating, with repayment linked to underlying trade flows.

Sustainable finance provides a framework for cross-border capital deployment. At HSBC, financing is structured across lending, trade and capital markets. Chaoni Huang, head of sustainable finance and transition, Asia at HSBC, said that sustainability-linked and transition financing are “designed to support pipelines across jurisdictions”, allowing capital to be deployed across markets using a consistent framework. These structures link pricing to measurable targets such as emissions intensity and energy efficiency and combine bank lending, capital markets issuance and development finance participation. This is one of the few areas where structures are already applied consistently across markets, providing a basis for broader integration.

Flow capture anchors activity at scale. Banks such as BNI process large volumes of payments, trade transactions and foreign exchange flows on a recurring basis, generating deposits, liquidity and fee income that support financing activity across markets.

Michael Wen, Executive Vice President, Corporate Finance Products, Cathay United Bank

Anand Jha, Head of Trade Finance and Lending, Asia Pacific and Middle East, Deutsche Bank

Why it does not scale

The first constraint is fragmentation in execution. Projects, trade flows and financing structures are still developed on a case-by-case basis, with limited reuse of frameworks across transactions. Mercieca noted earlier that infrastructure projects continue to be “developed and financed individually”, and this reflects a broader pattern across sectors. Each transaction requires separate negotiation of contracts, risk allocation and financing terms, which slows deployment and limits scalability.

The second constraint lies in the increasing complexity of cross-border flows. Kanwar highlighted that activity across the China–ASEAN corridor is “increasingly multi-directional”, with corporates operating across several markets simultaneously. This complexity requires customised treasury, liquidity and foreign exchange structures for each client, reducing the ability to standardise solutions or scale them across markets. It reflects how scale is being driven by more complex operating models rather than simpler, repeatable structures.

The third constraint is the uneven development of sponsor and institutional capital ecosystems. While financial sponsors and global asset managers are active in certain markets and sectors, their presence is not consistent across the region. Wen described how transactions rely on underwriting, syndication and distribution to bring multiple participants into a deal. Where these structures are well established, capital can be mobilised more efficiently. Where they are not, projects remain fragmented and difficult to scale.

Regulatory and currency fragmentation further constrain scaling. Cross-border transactions must navigate different legal frameworks, capital controls and currency regimes, which affect how capital can be deployed and repatriated. Hedging costs, liquidity constraints and local market conditions introduce additional complexity. These factors require each transaction to be structured individually, reducing the ability to standardise or streamline financing in different jurisdictions.

Data and framework inconsistency also limits coordination. Differences in credit assessment, sustainability definitions and disclosure standards make it difficult to compare transactions across markets or aggregate them into scalable portfolios.

Risk distribution remains constrained by the availability and capacity of participating institutions. Jha pointed out that cross-border financing often requires “working with multiple parties to allocate different types of risk”, with local banks, multilateral institutions and global banks each taking specific roles. Not all risks can be transferred or shared effectively, and certain exposures remain concentrated among a limited group of institutions, limiting the extent to which capital can be mobilised and recycled.

Belinda Han, Head of Transaction Banking Asia Pacific, MUFG

Chaoni Huang, Head of Sustainable Finance and Transition, Asia, HSBC

Where value sits

As cross-border financing expands, value is shifting away from balance sheet lending towards control over flows, structuring and capital distribution. Margins on traditional lending are under pressure, while returns are increasingly generated from fee-based activities, foreign exchange, liquidity management and capital market participation.

Transaction flows provide the most consistent source of value. Corporates generate recurring activity in payments, collections, foreign exchange and trade finance. Kanwar noted that flows are “increasingly multi-directional”, reflecting how companies operate across several jurisdictions at the same time. This creates sustained demand for transaction banking services, with revenue generated through fees, spreads on foreign exchange and liquidity management. Banks that control these flows benefit from stable income and access to deposits that support wider financing activities.

Origination is another critical source of value. Banks that engage early with clients during market entry and expansion are positioned to capture downstream activity across payments, trade and financing. Institutions such as UOB operate at this stage by advising corporates on entering new markets and connecting them to local partners. This allows them to anchor relationships before financing is arranged, increasing their ability to capture flows and structure transactions as activity develops.

Koh noted that this early-stage engagement can run for years before financial transactions materialise, with value realised later across deposits, lending, trade finance and foreign exchange as companies establish operations. This positions origination not as a single transaction but as a pipeline that shapes flows and financing activity over time.

Structuring and distribution generate value through fees and capital efficiency. Wen said that underwriting, syndication and distribution allow banks to “underwrite first, then bring in other lenders and distribute the risk”, enabling them to arrange financing without holding the full exposure on their balance sheets. By coordinating participation from multiple lenders, investors and insurers, banks earn structuring and arrangement fees while freeing up capacity for additional transactions. This model is increasingly important as capital requirements tighten and large transactions require broader participation.

Project and sponsor-led financing also shifts value towards origination and structuring. Financial sponsors and institutional capital providers play a central role in developing projects and assembling capital structures. Banks participate as arrangers, underwriters and distributors, earning fees rather than relying solely on lending margins. Where sponsor pipelines are established, transactions move more efficiently and capital can be deployed repeatedly, creating a more predictable flow of business.

Risk distribution is another area where value is created. Jha noted that transactions often require “working with multiple parties to allocate different types of risk”, with local banks, multilateral institutions and global banks each taking specific roles. Institutions that can structure and distribute risk effectively are able to intermediate between borrowers and investors, earning fees while managing their own exposure.

Sustainable finance introduces additional sources of value through structuring and advisory. These transactions require additional structuring, monitoring and reporting, generating advisory and execution fees while supporting capital deployment into transition and infrastructure projects.

Jimmy Koh, Managing Director, Network Partnership and Strategic Marketing, Group FDI Advisory, UOB

What enables scale

Standardisation of structures is a necessary starting point. Transactions continue to be developed on a case-by-case basis, limiting their ability to be replicated or scaled. Greater use of reusable frameworks, particularly in infrastructure and sustainable finance, would allow projects and financing structures to be applied with fewer adjustments.

Han’s emphasis on consistent structures across markets reflects how integration depends not only on standardisation but also on the ability to deliver comparable products, documentation and service levels across jurisdictions.

Stronger sponsor and institutional capital ecosystems are also critical. The presence of experienced financial sponsors and institutional investors determines whether projects can be aggregated into pipelines and brought to market efficiently. Where these ecosystems are developed, projects move more quickly from origination to financing and are able to attract participation from multiple sources of capital. Where they are not, transactions remain fragmented and dependent on individual institutions.

Risk distribution mechanisms need to broaden and deepen. Jha highlighted that cross-border transactions require coordination among multiple parties to allocate different types of risk. Scaling depends on expanding the range of participants able to take on specific exposures, including banks, development finance institutions and insurers. More effective syndication and distribution, supported by deeper capital markets, would allow risks to be transferred more efficiently and capital to be recycled across transactions.

Technology can support coordination, but it does not address the underlying structural constraints. Application programming interfaces are connecting payment, trade and liquidity systems across institutions, while artificial intelligence is being used to standardise data, automate due diligence and improve risk monitoring. Distributed ledger technologies are being tested for asset tokenisation and settlement. These developments reduce operational friction and improve efficiency, but they do not resolve differences in regulation, currency regimes or market maturity.

Regulatory and market alignment remains a critical factor. Differences in legal frameworks, capital controls and currency regimes continue to shape how transactions are structured and executed. Progress in cross-border regulatory coordination, along with the development of local capital markets and currency hedging mechanisms, would improve the ability to deploy and recycle capital across jurisdictions.

Cross-border financing is not yet a system

What exists today is a sequence of activities rather than an integrated structure. Flows are generated through corporate expansion and trade, projects are originated and developed by sponsors, financing is structured and arranged by banks and capital is distributed across multiple participants. Each of these steps can function effectively, but they are coordinated at the level of individual transactions rather than across a broader framework.

At the same time, value is increasingly concentrated in specific parts of the financing chain. Institutions that control flows, structure transactions and distribute capital are able to generate recurring income and operate with greater capital efficiency. Those that rely primarily on balance sheet lending face margin pressure and tighter constraints on growth. This shift reflects how cross-border financing is evolving from a lending-driven activity to a more integrated set of services.

Moving towards a system requires alignment across multiple dimensions. Standardised structures, stronger sponsor ecosystems, broader risk distribution and improved regulatory coordination all need to develop together. Technology can support this process by improving efficiency and connectivity, but it does not replace the need for structural alignment in different markets and institutions. This would allow transactions to move from individually structured deals to repeatable pipelines that can be aggregated, financed and distributed at scale.

Cross-border financing will become a system only when flows, risk and capital are coordinated rather than managed separately within each transaction. Until then, it will continue to scale in volume, but not in structure, as integration continues to develop.