For the commodity divisions of some banks, up to 50 percent of what they finance is shipped in containers. This is obviously a significant portion of the business. Container and vessel tracking is essential to both the buyer engaging in a refinancing process and the financing bank receiving the money it lent.
That money is received ONLY when the commodity reaches the buyer. But many financial institutions are left unaware of exactly when a container or vessel is scheduled to arrive, or of any potential complications and delays along the way: port congestion, unexpected transshipments, weather delays, etc. The route deviations we are seeing from major shipping companies as a result of the Houthi attacks in the Red Sea and Iran’s ship hijacking are a good example of how quickly things can change and complicate trade routes.
Financial institutions require predictability, which requires visibility, so many of them already possess container solutions. But these solutions mostly lack integrated sanctions compliance and due diligence capabilities, either: • Putting banks at unnecessary financial, regulatory and reputational risk • Causing financial institutions to act with an overabundance of caution, costing them legitimate business opportunities Without adequate sanctions compliance and due diligence technology, banks cannot really know if transactions are in-line with their strategies and risk appetites. It might seem reasonable to hire five more lawyers, or compliance expe.
