In a recent webinar by Bankers Association for Finance and Trade (BAFT), Surecomp’s Enno-Burghard Weitzel and Paul Warfield from Huntington National Bank discussed how banks can future-proof their compliance requirements – and address talent retention challenges – with digital trade finance.

While financial institutions face numerous challenges in the area of trade finance, there’s no denying that compliance is one of the most significant. During a recent BAFT webinar sponsored by Surecomp, 62% of those polled cited compliance as their top pain point.

“Compliance is the number one topic, because it has the downside risk of not being able to continue the business if the operations of the business are incompliant,” notes Enno-Burghard Weitzel, SVP Strategy, Digitization and Business Development at Surecomp. “And the regulatory requirements are only ever growing.”

Adding to the challenge, different banks may face different compliance requirements depending on where they operate. While a bank operating in the US might only need to comply with US rules, for example, a global bank may also need to comply with legislation in the UK, EU and Singapore.

Efficiency and talent retention are also significant concerns that share some common ground: if banks are struggling to attract and retain talent, they will need to improve the efficiency of their processes.

“In trade finance, if you onboard a person to a new position, you’re not only training them on the job – you have a huge compliance component as well,” says Paul Warfield, VP, Managing Director Global Trade and Treasury of Huntington National Bank. He adds that employees face a growing burden in making sure new expectations are being met: “There’s just a lot to learn, and the expectation is you’ll be efficient enough to contribute to the team quickly.”

How can technology help?

Technology vendors can play a significant role in helping banks grow their businesses. For example, by connecting a wide ecosystem of trade finance platforms, vendors can allow banks to connect to their platform of choice.

By taking advantage of AI and OCR scans, and bringing processes into a more digital environment, banks can also ensure that more actions take place in the background, notes Warfield. This, in turn, frees employees up to spend less time checking documents – thereby boosting efficiency, raising the value of the employee, and protecting the bank from bad actors.

As Weitzel points out, a strong system that can update itself frequently and logs employees’ actions, “also reduces the mental load on operators.” As a result, people are likely to stay in their roles for longer because they are able to focus on the more interesting element of the job – namely decision making.

While the 99.99% straight-through processing rates found in the payments world may be unfeasible in the context of trade finance, vendors can nevertheless add value by harnessing AI engines and OCR functionality to turn paper into data, analyse that data, and find anomalies. “If we can equip banks with an 80-90% pre-checked transaction, and allow them to focus their manual work on looking at the last 10-20%, then we’ve created value,” says Weitzel.

Overcoming barriers to innovation

But not all trade finance solutions are equal. Unlike on-premise solutions, software-as-a-service (SaaS) solutions enable banks to take advantage of innovation while avoiding the need for a lengthy implementation process. For example, Weitzel explains that keeping up with industry changes like ISO 20022 “is super easy in SaaS solutions. Our platform SaaS solution is already Swift 23-enabled, API-enabled, ISO 20022-enabled – it’s a one-time development for us, and every user can then use it.”

However, many banks are still using on-premise systems that were implemented as much as 10 years ago, and consequently aren’t automatically updated every few months. Weitzel reflects that one barrier to adoption of newer trade finance technology is that vendors are not always effective in explaining the value of new technology.

“If a customer can grow their business, the choice of technology is secondary,” he says. “Vendors need to provide better arguments as to why adopting new technology can foster business and add value.” For example, this might involve demonstrating how the use of AI can result in better customer service.


Looking forward, says Warfield, future-proofing in the trade space boils down to having the right systems in place. One particular challenge that banks are facing is how best to manage the oncoming retirement of employees who have been carrying out key roles for decades. “We’re losing a lot of industry expertise due to retirement, and we seem to have challenges bringing in new employees to manually check documents for compliance. It’s not appealing to everyone.”

Against this backdrop, it’s important to manage the loss of industry expertise, while harnessing technology to create an environment that makes it easier to attract new employees. It’s also important to invest in technology that can support firms as they grow, and that keeps parties connected to the trade finance ecosystem as it continues to evolve. Supporting collaboration is particularly important given that no single player in the trade space has a market share of more than 6%.

As Weitzen concludes, “Future proofing means that if you take a decision now, you should never be in the position that you regret that decision the day after tomorrow.”

To learn more, view the webinar recording now on our YouTube channel.