Toronto-based tech firm Surecomp is seeking to tackle attempts at double financing through the launch of an invoice comparison tool, which it hopes will broaden access to finance by minimising banks’ risk of exposure to fraud. 

Surecomp announced this week that the solution has been introduced to more than 25 international banks since the first quarter of this year. 

It works by placing encrypted information from invoices into a global database, which banks can use to check whether finance has already been requested for a particular transaction. No confidential customer information is made visible, the company says. 

“We’ve seen a dramatic rise in duplicate trade financing fraud, with billions of dollars being lost and many banks reviewing their appetite for risk, which has further impacted the trade finance gap,” says Enno-Burghard Weitzel, Surecomp’s senior vice-president of strategy and business development.  

“We believe that an effective fraud prevention solution is a must-have for banks to sustain their trade finance business.” 

Surecomp says the tool can also identify whether suspicious activity has been detected in relation to an invoice, and also provides lenders with a channel for communication in instances where “fuzzy” matches are found. 

The company hopes the solution will give comfort to banks that have become increasingly nervous about providing trade finance facilities – an issue that has acutely affected smaller and mid-sized commodity traders – after the scandals of 2020. 

In the first few months of that year, the collapses of Hin Leong and Agritrade – two Singapore-based commodity trading houses – resulted in losses worth billions of dollars for numerous banks. It soon emerged that the same invoices had been used to obtain financing multiple times. 

Several other smaller traders have since been caught up in similar scandals, and in some cases, are still the subject of ongoing litigation. 

Weitzel says the value of the tool will be driven by the volume of invoices that are added to the database, and therefore the number of bank participants. 

“The more banks that use the solution, the greater the probability of identifying duplicate finance requests and the more effective it will be in preventing losses to this kind of fraud,” he tells GTR 

“We plan to achieve scale by leveraging our global network of some 250 banks that already use our back-office solutions.”  

He adds the tool will be part of a broader platform that will allow banks to incorporate it into their wider trade finance processes, rather than it acting as a standalone fraud prevention solution. 

Other industry participants have also sought to tackle trade finance fraud through document duplication checks. 

Financial messaging service Swift has trialled a fraud prevention solution that uses MonetaGo’s Secure Financing platform, while in Singapore, a group of banks announced in 2020 they would establish a blockchain-based registry of trade finance transactions. 

Surecomp’s announcement comes amid a flurry of activity for the Canadian tech firm. Last month it integrated the legal entity identifier into its systems, giving customers real-time access to unique identification data of parties involved in trade transactions, and also partnered with Swedish fintech Enigio to add digital original documents into its cloud-based solution.