MonetaGo Provides World’s First-Ever Solution to Duplicate Finance Fraud in Trade Finance
SINGAPORE & NEW YORK – (COMMERCIAL THREAD) –MonetaGo, a provider of financial technology solutions, today announced a new platform to combat financial fraud in trade finance globally.
The trade finance world has repeatedly been the victim of duplicate finance frauds. In such cases, companies can obtain financing in the country of origin, the country of destination and a financial center – all on the same trade. A holistic approach is therefore necessary to globally mitigate the risks. “Duplicate funding happens for many reasons. A unified solution used by lenders to combat this type of financial fraud in international trade is the most effective way to help solve this problem, ”said Mark Borton, Head of Trade & Working Capital Finance Product and Asia Transactional & Trade, National Bank of Australia. “The MonetaGo secure finance platform appears to be a simple utility that lenders around the world could potentially use to dramatically improve the trade finance experience. ”
As banks and financiers embrace digitalization, they are presented with new opportunities to share information while maintaining the privacy and security of customer information. MonetaGo’s approach is key to breaking down information barriers between and between banks, platforms and regional solutions. “Information silos between lenders lead to duplicate funding fraud because they often have little information that the client has submitted transactions for funding to other lenders,” said Ed Aldorino, Head of GTB Asia, Lloyds Banking Group. “The integrity of the entire trade finance landscape is vital to the trade finance flow, and that is why we were thrilled to participate in platform testing with MonetaGo. The easy-to-understand platform allows us to prevent double-funding fraud globally in ways that were not possible before and we look forward to the impact it will have in the markets we serve.
To provide a secure and standardized solution globally, MonetaGo is partnering with SWIFT on a proof of concept. The POC will allow MonetaGo to leverage SWIFT’s proven and robust API infrastructure, ensuring that users can have confidence in the management of connectivity, authentication, security, interoperability and network reach. If the pilot proves successful, more than 11,000 institutions connected to SWIFT will be able to access MonetaGo’s financial validation service easily and securely in a reliable and globally standardized manner.
“Financial fraud in cross-border commerce cannot be fully mitigated with local registries, so it makes perfect sense to leverage SWIFT’s global reach to help institutions around the world solve this problem. By bringing global API standards, identity and security, SWIFT can help alleviate the growing challenge of digital islands. We are working with MonetaGo to pilot the solution that will provide our community of financial institutions with an important tool to fight financial fraud on an international level ”, said Louise Taylor-Digby, Global Head of Business Strategy, FAST.
Last December, MonetaGo received the award Singapore Monetary AuthorityFinancial Sector Technology and Innovation (FSTI) Proof of Concept Grant (POC). The FSTI POC grant provides financial support for the experimentation, development and diffusion of emerging innovative technologies in the financial services sector. In the POC, MonetaGo with 25 organizations, experimented with ways to detect and prevent duplicate funding cases regarding invoices, purchase orders, warehouse receipts and bills of lading in different financial institutions, without institutions financial institutions do not need to share commercially sensitive information. with each other. The POC was conducted over a 6 month period that ended on June 30, 2021. Lessons learned from this POC are available on the MonetaGo website.
Following the positive results and feedback, the registry is now being rolled out and customer onboarding has started. The basic components of this new platform have been developed over years and are the result of MonetaGo’s long experience in the space having operated the most successful commercial register in recent years with more than 1.8 million funding already processed. The next natural step in the evolution is to provide connectivity at the international level, where the partnership with SWIFT will be useful. Leveraging the SWIFT API channel for standardization and distribution of the solution would increase its reach and efficiency.
“Interoperability between disparate local registries built on different technology platforms requires common standards and specifications to achieve results,” said Shinichiro yamazaki, Global Head, Business Innovation Unit, Global Trade Finance Department, Sumitomo Mitsui Banking Company. “We are delighted to have participated in the testing and development of a simple system capable of preventing fraud on a global scale.”
It is important to note that the platform is not only offered to traditional banks and financiers, but also to non-bank financial institutions (NBFIs) and non-bank lenders, including fintechs and trade finance funds. who provide customers in many industries with trade finance solutions. “MonetaGo’s secure financing solution can mitigate fraud not only for bank financiers, but also for alternative lenders; this is exactly what the trade finance ecosystem needs. For too long, financiers of all types have lacked the ability to communicate effectively and efficiently to prevent duplicate finance fraud, and it’s exciting to see this innovative fintech pioneering how trust can be. maintained globally in commercial fraud mitigation. ” Tom james, CEO / Founder, TradeFlow.
Deduplication is done by identifying whether the fundraising transactions use the same documents. By registering a unique “document fingerprint” created by cryptographic hashing, the registry does not store actual customer or transaction data. The registry can therefore be independent of the locality of the lender, and there is no problem sharing information between parties or borders, as fingerprints cannot be reversed to reveal the data that created them. The system can then indicate the status of a document recorded as “funded”, indicating to an applicant on the platform that a lender has already provided funding against that document. “Unfortunately, today lenders do not have a robust solution to automatically detect duplicate funding fraud, for a variety of reasons, including the confidentiality of transaction data sharing between lenders,” said André Casterman, member of the board of directors and chairman of the ITFA Fintech committee. Fortunately, MonetaGo’s secure funding platform provides a single document fingerprint that protects the privacy of lender and applicant data, while performing deduplication control and preventing fraud. ”
MonetaGo’s solution adopts ISO 20022 standards and allows its users to easily implement the appropriate database schemas. “Global technology providers must migrate from small-scale digital islands to interoperable, platform-independent standards in order to achieve the next level of mass digital transformation and realize its inherent benefits. It is inspiring to see MonetaGo adopt two essential standards that will enable effective and efficient engagement of lenders and their clients’ business and supply chain systems in the future – GLEIF and ITFA DNI. Not only does MonetaGo enable critical use cases for customers, but does so by leveraging advanced techniques to minimize friction. Interoperability beyond its own walls is the future we are all working towards. noted Oswald Kuyler, Managing Director of the Digital Standards Initiative, International Chamber of Commerce. ”
Ultimately, those who benefit most are not only banks and lenders, but also end users and customers of trade finance. To mitigate the risk of loss due to trade finance fraud and to manage operational costs, financiers around the world have abandoned customers, resulting in trade finance needs not being met. Almost half of all small and medium-sized enterprises (SMEs) do not have access to adequate financing. This problem also affects mid and large cap companies as well as multinational companies which all face significant liquidity issues in many different industries. “Duplicate finance fraud occurs far too often, impacting the accessibility of affordable business finance for millions of businesses around the world,” said Jesse Chenard, CEO, MonetaGo. “The integrity of the entire trade finance landscape is vital to the flow of trade finance because it plays a crucial role in the economy. We are proud to work with international organizations to provide a global, standardized public service that seeks to help prevent duplicate finance fraud at the national and cross-border level, providing everyone with a fair opportunity in trade finance. ”
Organizations wishing to implement the Secure Funding Platform can start the onboarding process through SecureFinancing.org because the system has been given the green light to go into production.
MonetaGo provides business solutions for financial operations. The MonetaGo product suite is compliant with applicable regulations and designed to improve the efficiency and security of financial products.
Designed to support multiple technologies and interact seamlessly with existing financial infrastructure, financiers can integrate MonetaGo’s products with minimal disruption and cost.
For more information visit www.monetago.com.