VIDEO | Red flags in trade and supply chain finance - Trade Treasury Payments

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VIDEO | Red flags in trade and supply chain finance

At the BAFT (Bankers Association for Finance and Trade) General Annual Meeting in Washington, DC, Trade Treasury Payments (TTP) spoke with Mariya George, CEO and Co-Founder of Cleareye.ai, about red flags in the compliance process for trade and supply chain finance.

George said, “Red flags are changing significantly in the banking industry because of the complexity of trade finance and also how sophisticated financial criminals are becoming these days.”

Beyond traditional inconsistencies in documentation, banks are now dealing with challenges like phantom shipments, over- and under-invoicing, and multiple invoices with differing goods descriptions. These types of issues are appearing more frequently and require a broader lens to detect.

George said, “It’s very important to understand… the full network of your customer’s contacts, even in the context of the transaction.” 

“In addition to the transaction-level red flags that we look for, there are two other areas that we’re constantly looking out for. One is know your customer’s customer. It’s very important to understand the full network of your customer’s contacts, even in the context of the transaction. The second is called network analysis. When we are looking at a specific transaction, we look at all the parties involved in the transaction and then try to figure out how these parties are connected and look for potential red flags and anomalies there.”

Institutions are turning to technology to do this at scale. From digitising documents to automating compliance workflows, banks are using AI, machine learning, and natural language processing to reduce risk and improve efficiency.

George said, “Gone are the days when banks thought they could do this all manually. Every single bank we talk to is, in some shape or form, working on this.”

In trade finance specifically, Banks are using AI to convert unstructured documents into structured data, which enables automated red flag checks, sanctions screening, and regulatory compliance. In some cases, this is paired with distributed ledger technology to push toward straight-through processing.

George said, “In countries like the UAE, the Central Bank has mandated that all the banks have to do those checks. Most of the global banks have realised that they need it, and they’re automating it. Regional banks are catching up in North America, for example, and we are seeing significant traction in Europe as well.”

For those attending the conference, the message is: don’t wait.

George said, “The time is now to act on leveraging technology because it exists out there. Tap into that ecosystem and connect that with your banking systems to make sure that… financial crime is contained.”

As trade becomes more interconnected and more data-driven, the institutions that adopt the new tools early will be best positioned to lead.