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S'pore banks should gun for compliance advantage

Published Sun, Feb 16, 2014 · 10:00 PM
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SINGAPORE banks need to look at compliance efforts as more than just a cost burden that needs to be fulfilled, and regard it as a competitive advantage. In particular, improving trade finance processes to close any money-laundering loopholes would enhance the Republic's reputation as the financial hub of Asia-Pacific.

Speaking to BizIT, Hugh Jones, CEO of Accuity, illustrated the current challenges banks and other financial institutions face in ensuring compliance for cross-border trade finance transactions. Accuity is a data solutions provider with a stable of 17,000 corporate clients, of which 60 per cent are banks and another 20 per cent are non-bank financial institutions such as insurance firms. It is part of the Reed Elsevier family of companies, having been acquired in 2011.

Companies are still reliant on paper-based processes when it comes to trade finance - and this hinders their efforts to monitor and detect potential money-laundering activities, Mr Jones noted. It is easy, for instance, to overlook a transaction when a company shipping hammers worth, say, US$5 each receives an invoice stating the price of each hammer as US$1,000 when records are all stored in paper form and automated analysis to flag a suspicious transaction is not available, he explained.

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