The impact of regulation on correspondent banking and the effects of a widening trade finance gap on small- and medium-sized enterprises (SMEs) are the key findings in The International Chamber of Commerce (ICC) Banking Commission’s 2015 Global Survey on trade finance.
Certainly, the trade finance gap is highlighted throughout the survey of 482 responses from 112 countries around the world while compliance emerges as the most significant barrier to trade finance.
Nearly 46% of the banks surveyed terminated correspondent relationships due to the cost or complexity of compliance. Some 70% of respondents reported declining transactions due to anti-money laundering (AML) and know your customer (KYC) requirements.
The percentage of respondents citing anti-financial crimes compliance requirements as a significant impediment to trade finance has increased from 69% last year, to 80% in this year’s survey.
This trend is expected to continue, as nearly all (93%) of respondents expected compliance requirements to increase during 2015.
Trade finance gap
SMEs are among the hardest-hit by the trade finance gap, accounting for nearly 53% of all rejected trade finance transactions.
By contrast, 79% of the trade finance transactions for larger corporates are accepted, the survey says.
Download the ICC Global Trade and Finance Survey 2015
Learn more about the 2015 ICC Global Survey
Categories: Trade Based Financial crimes News