Two-thirds of organizations still use manual search for compliance with trade and export controls, according to survey
Two-thirds of banks, corporations and non-banking financial institutions (NBFIs) still use search engines to comply with trade and export compliance regulations, according to a trade compliance survey conducted during the first half of 2021 by Accuity, a LexisNexis Risk Solutions company and a global provider of financial crime screening, payment services and know your customer (KYC) solutions.
Manual search leaves organizations open to missing red flags and making misinformed decisions over whether to accept business. This can expose them to risk and potential regulatory action and may also result in missed opportunities to participate in safe and legitimate trade transactions.
Trade finance providers, as well as insurers, logistics firms and others involved in international supply chains are responsible for conducting due diligence on the parties and items involved in the transactions and shipments they facilitate. This includes verifying the legitimacy of the customer and all parties to the transaction, checking for dual-use or controlled goods (for example, those that could have a military purpose) and ensuring funds and goods are not going to or coming from a sanctioned location.
The study questioned more than 120 professionals from leading banks, insurance and fintech organizations operating in APAC, EMEA and the Americas. It shows how widespread manual search remains even years after the emergence of automated solutions to detect trade compliance risks, such as sanctioned entities and dual-use goods.
More findings from the research are available in this infographics.