Blog

ICC Trade Register

• In order to manage Trade Finance as a product effectively, banks do not only need to understand the full risk profile (e.g., country, currency, counterparty, delivery, and credit risk) of its business, but also the regulatory and strategic implications.
• The ICC Trade Register aims to help banks achieve this by providing an objective, transparent view of the credit-related risks and characteristics of Trade Finance using a rich, data-driven approach.
• The 2016 report corroborates findings from previous years that Trade Finance products present banks with short average maturities, and little credit risk, with low default rates and loss rates.
• For Short-Term Trade Finance specifically, the 2016 Trade Register reveals a slight uptick in defaults observed from 2013-2015 across products and geographic regions, resulting from a combination of one-off events and potentially more systematic factors. Nevertheless, these products continue to have a favourable risk profile versus comparable asset classes, such as corporate and small and medium-sized enterprise (SME) lending.
• Similarly, for Medium to Long-Term Trade Finance, the 2016 Trade Register shows an increase in defaults across all regions except ex- Commonwealth of Independent States (ex-CIS) countries and the Middle East. Nevertheless, the vast majority of this effect is driven by two countries, Singapore and Spain, as a result of non-systemic, obligor-specific events.
• The results of the 2016 Trade Register provide the basis for strong advocacy for favourable treatment of Trade Finance as an asset class by the Basel Accords.

https://iccwbo.org/publication/icc-trade-register-2016/

SWIFT KYC Registry

• SWIFT is helping to improve the efficiency, effectiveness and standardisation of the bank-to-bank KYC process by the creation of a global shared platform to centrally collect and distribute up-to-date, standardised KYC information.
• The KYC Registry is a global repository for up-to-date due diligence documents and data for banks. Banks remain owner of their information and are responsible for their own KYC process, criteria and results.
• The KYC Registry accepts information from correspondent banks and fund distributors and custodians. All SWIFT users registered to use it are able to access the Registry. Non-SWIFT users are not able to access it.
• The Registry focuses on Know Your Customer information for financial institutions. It holds information about institutions, not about individuals or private customers. The Registry provides a standardised set of data and supporting documentation relevant to KYC and Customer Due Diligence (CDD) requirements.
• The standard set of KYC data and document specifications was defined with the KYC Working Group of 12 leading correspondent banks to cover the baseline requirements of the world's leading supervisory authorities.

https://www.swift.com/our-solutions/compliance-and-shared-services/financial-crime-compliance/complete-end-to-end-kyc-solutions

Digital Trade

• Distributed Ledger Technology (Blockchain)
• Smart Contracts
• Internet of Things (IoT)
• Artificial Intelligence (AI)
• Industrial Revolution 4.0

Look out for:

• Brexit
• Future of the EU
• Trade Protectionism
• Free Trade Agreements
• Cyber-security
• Gap in global trade finance of around US$1.6 trillion annually

www.tradefinance.training