Trade finance users and providers need to adapt to the increasingly tough compliance demands on international trade according to the head of a Dubai-based advisory that helps small- and medium-sized enterprises (SMEs) raise bank finance.
Vikram Venkataraman, managing director of Vianta, says clients can do a few things to make life easier for their banks, while banks could change the way they approach trade finance for SMEs.
Clients should be proactive, plan in advance and provide their banks a list of counterparties they intend dealing with, along with their websites, and banks’ names says Venkataraman.
He also suggests they should obtain, to the extent possible, credit reports for their counterparties and a list of their suppliers and buyers. They could also consider obtaining credit insurance, which can be useful because it assures banks that international insurers have carried out due diligence on these parties.
Banks can also try and make life easier according to the SME advisor. He suggests they could produce guidebooks and leaflets or organise seminars on compliance to educate clients.
Relationship managers should be trained to train clients while compliance officers should be retrained says Venkataraman.
He says the compliance officer’s job is to assist businesses to conduct safe business and mitigate risks to the extent possible. Banks are in the business of taking risk, but risks should be identified and mitigated, he concludes.
Categories: Trade Based Financial crimes News