Commerzbank Introduces Machine Learning to Trade Finance Compliance

Commerzbank Introduces Machine Learning to Trade Finance Compliance
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Commerzbank recently collaborated with fintech company Conpend in automating certain compliance pre-checks processes designed for trade finance transactions. The solution is expected to minimize transaction processing durations while enhancing risk controls and communication with customers.

The Head of Product Management Trade Services at Commerzbank Enno-Burghard Weitzel said: “We are leading the change towards a new era for trade finance processing. Our aim is to focus the expertise of our trade finance specialists to the crucial and complex parts of the business while using artificial intelligence to improve efficiency and further optimize risk controls.”

Commerzbank intends to automate about 80% of all the chosen compliance-based checks relating to the trade finance processes of the bank by 2020.

Back in October 2018, Commerzbank began a pilot phase for automating the anti-money laundering tasks that are a vital section of all trade finance transaction reviews. Upon completion of the pilot phase, the bank formulated a plan for release an additional stage of all the sanctions checks revolving around trade finance throughout 2019.

Commerzbank prides itself on being the top trade finance bank in all of Germany. It has commenced a collaboration deal with Conpend, which is a fintech firm geared towards on solutions for finance operations.

The fintech company utilizes progressive machine learning and optical character recognition for deriving data from physical documents, recognizing patterns and flagging deviations.

The machine learning aspect entails that the software will regularly boost the identification of non-complaint transactions while it is still in use.

It is expected to utilize application programming interfaces for connecting to Commerzbank’s already existing trade finance processing resources and come up with the bank’s fully detailed audit trail designed for spearheading the growing expectations of most regulators as far as reporting requirements are concerned.

“The processing of trade finance transactions is becoming more complex and prone to higher risks, as manual processes struggle to keep pace with the increasing regulatory and market trends. However, we are leading the change towards a new era for trade finance processing. Our aim is to focus the expertise of our trade finance specialists to the crucial and complex parts of the business while using artificial intelligence to improve efficiency and further optimize risk controls. This is not only a long-term plan but something we are implementing now to enhance the client experience by significantly reducing the time for transaction processing and the associated costs,” said Enno-Burghard Weitzel.

“A growing part of the activity within a bank’s trade finance division is focused on crucial but routine activities that underpin the value-added services they provide to clients. This provides a huge opportunity to improve efficiencies and allow more focus on client servicing. I’m delighted to partner with the team at Commerzbank that shares the same vision of modernizing the traditional elements of trade finance processing,” explained the Founder and Managing Director of Conpend Marc Smith.

The main function of financial institutions in this trade finance enterprise is to promote global trade deals between two or additional parties through managing and assuming risks.

The banking institutions involved give customers risk mitigation through covering the payment risk as well as other event and physical risks, particularly in the supply chain that exists between importers and exporters through products.

 

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