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Payments solutions firm Accuity has partnered with trade finance solutions vendor China Systems to create a Swift-certified trade and supply chain finance product, which will offer compliance checks for trade finance transactions.
Financial institutions face growing pressure to comply with changing and stringent compliance regulation – 80% of firms surveyed by the International Chamber of Commerce (ICC) in 2015 cited compliance requirements as a significant impediment to trade finance, up from 69% last year, with 93% of respondents predicting that compliance requirements will continue to rise.
The ICC report also highlighted the lower rate of acceptance by banks for trade financing from SMEs, driven primarily by the ‘derisking’ strategy undertaken by banks in higher risk jurisdictions due to compliance and regulatory concerns. Specifically only 53% of SMEs’ trade finance applications were accepted by banks versus 79% for large corporations. The challenge is that 93% of firms in the Asia Pacific Economic Council region are SMEs, making it an even greater challenge for SMEs in the region.
As money launderers increasingly seek to exploit the complexity of trade finance transactions to obscure the illegal movement of funds, and integrate them into the formal economy, it is crucial that firms have an effective system in order to detect and mitigate these financial and reputational risks.
Accuity and China Systems' new product that offers comprehensive compliance checks, transaction management and audit trail functions, available in real time – effectively making compliance part of the process.
Accuity’s Compliance Link solution will manage the case management and screening of each transaction, while China Systems’ Eximbills platform will record the results of each decision taken, controlling the transaction workflow and providing full visibility on each decision and subsequent actions.