The International Chamber of Commerce’s (ICC’s) 10th annual Global Survey shows that aspects of anti-money laundering and counter financing of terrorism (AML/CFT) regulations and compliance create obstacles for nearly all banks.
The survey also revealed a lack of trade finance services for smaller businesses and in emerging countries, a situation that is in very large part put down to the high costs of providing finance in smaller or more difficult markets.
When asked what potential obstacles banks saw to their future growth prospects, respondents’ answers were stark.
Regulation and compliance were named by 93 per cent of respondents as potential obstacles while 87 per cent pointed to complying with counter-terrorism and international sanctions regulations.
There is now widespread agreement that the cost of compliance is making it tougher for local banks in emerging markets to write international business while global financial institutions have been trimming operations in riskier territories for years.
Scope for improvement
The problem is clear to see, but according to World Trade Organisation director-general Roberto Azevêdo, there appear to be prospects for improvement.
“Unmet demand for trade finance leads to a loss of economic growth and global trade,” he said in comments about the ICC’s 2018 Global Survey.
“But the international community is stepping up efforts and working together to improve [access to] trade finance,” he concludes.
Categories: Trade Based Financial crimes News