Standard Chartered Tests Duplicate Finance Detection Tool

Standard Chartered, Kenya, retail

Financial services company Standard Chartered has completed what it called an industry-first test of the trade financing validation service from MonetaGo over the SWIFT payments system.

Standard Chartered carried out this pilot to “mitigate the risks of duplicate trade finance fraud on a global scale,” according to a Thursday (Sept. 8) news release.

Trade financing validating service is the “first natively global solution that is interoperable between markets” and provides checks on financing transactions to identify and prevent duplicate financing frauds, per the release.

“Trade finance providers register select document information by sending the information via [application programming interface [API]),” the release stated. “MonetaGo’s Secure Financing system cryptographically hashes the data to create document fingerprints that can be compared with already registered document fingerprints to detect duplicates.”

Customer and transaction data are encrypted in adherence with global banking and data protection rules, and the document fingerprints created by the system cannot be reverse engineered to show the data that produced them, according to the release.

The pilot took place in the second quarter of 2022 and saw Standard Chartered test the deduplication solution using mock invoices, bills of lading, purchase orders and warehouse receipts. The platform came back with results of exact matches and suspiciously similar transactions in almost real time, the release stated.

PYMNTS explored the issue of duplicate financing fraud last year in an interview with MonetaGo CEO Jesse Chenard.

Read more: Duplicate Financing Fraud Faces New Foe That Sheds Light on an Elusive Thief

“Say I’ve got a receivable for $1 million,” he said. “I take it to bank No. 1 over here, take it to bank No. 2 over there, maybe take it to the overseas bank that the shipment is ultimately going to, and they are able to finance it in multiple venues.”

That’s textbook duplicate financing, something that occurs both at the low end of the trade spectrum in marketplaces and at the higher end in commodities trading scandals.

“In certain cases, it’s an ordinary course of business,” Chenard told PYMNTS. “It’s a problem, but nobody really knows how big the problem is.”

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