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Safe trade

Trade based financial crime: Mitigating TBFC compliance risk with technology

45 min watch


Watch this webinar on the intersection of document digitisation, anti-money laundering, compliance and fraud across the trade finance space.

  • How can technology be leveraged for trade based financial crime prevention?
  • To what extent is digitisation and innovative technologies like AI crucial for enhancing detection, preventing trade-based financial crime, and streamlining trade finance processes.
  • Why is it urgent for financial institutions to move away from outdated manual processes and adopt digital solutions to effectively combat TBFC and improve operational efficiency?
  • How important is it to harness extensive customer and transaction data?
  • Why should financial institutions partner with fintech providers to achieve a thorough analysis and monitoring of trade finance activities for better risk mitigation.

In an era of global trade surpassing $31 trillion annually with a growth rate over 4%, financial institutions face the mounting challenge of trade-based financial crime (TBFC). TBFC, which involves legitimising illicit funds through trade finance, is increasingly exploited by criminals against a backdrop of global economic instability. With an estimated 2%-5% of global GDP, equivalent to around $800 billion to $2 trillion, lost to money laundering and TBFC according to UNODC, the need for effective countermeasures has never been greater.

Efforts to combat TBFC are pivoting towards technological solutions that offer an end-to-end view of TBFC risk, including digitisation of trade finance documentation, vessel tracking and artificial intelligence (AI) powered risk models. The manual processes currently bogging down financial institutions make them prone to the concealment of illicit transactions, significantly stretching transaction cycles and affecting trade finance operations' efficiency.

Technological advancements are crucial in enhancing TBFC detection and prevention, streamlining operations, and reducing criminal exploitation opportunities. However, many financial institutions struggle with digital transformation, hindered by outdated manual processes and complex regulatory demands.

To effectively manage TBFC, financial institutions must utilise extensive data, including customer and transaction information, and employ AI in collaboration with fintech providers for thorough trade finance analysis. This approach improves suspicious activity monitoring and criminal misuse protection.

Heading into 2024, the antidote to TBFC lies in the adoption of digital innovations and technologies like AI. Financial institutions must advance trade finance digitisation and technology integration, essential for bolstering due diligence, enhancing financial crime prevention, and safeguarding the global financial system from TBFC threats.

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