High volume quality assurance of a banks trade finance transactions
Our client is a dual regulated international bank focused on corporate, institutional, retail, small business and correspondent banking along with treasury and trade finance. Trade Finance (TF) has historically been a core part of our client’s business with a high volume of transactions taking place in a six-month seasonal window. The seasonality was due to their role in the market of a particular commodity.
As part of their commitment to ongoing monitoring and continual improvement of their Financial Crime (FC) framework the Firm wanted to introduce an independent third-party Quality Assurance review as part of the TF process. Given their experience of previous projects supported by Pathlight the Firm asked for our support.
Our initial step was to familiarise ourselves with the Firms TF function which we did through meetings with key stakeholders; review of procedural documentation and holding of walkthrough workshops to ensure our team were up to speed on the Firms approach to the related due diligence.
As there would be a high volume of activity during the project we mobilised a team of reviewers who were overseen by a project manager. The team undertook an intensive three-day training process to ensure they could ‘hit the ground running’. We set up a separate project room for the dedicated team and implemented a hybrid work plan which made sure we could provide cover for an extended working day to ensure a timely review turnaround. The team rotated between working in our project room and working from the client office (where space was limited) so there was visibility.
Over an initial period of six months, we undertook a Quality Assurance review of 100% of the Bank’s TF transactions as part of the overall approval process (i.e. real time). We then continued over a further period where we reduced the review to a 20% sample of TF transactions on a lookbook basis (i.e. not real time).
As part of this process, we provided monthly thematic reports to the bank outlining Quality levels, any exceptions on a thematic basis and related areas of enhancement. We also reported through to the Board Compliance Committee on a quarterly basis.
Our work provided assurance to the client over their peak TF period. It also allowed us to identify areas of process improvement to the policies, procedures and decision-making process on a real time basis so the Bank could further enhance their approach to TF compliance.
