Financial services group Baft has created a new working group focused on anti-money laundering (AML) and know-your-customer (KYC) trade finance sound practices.

The group has been formed to meet the needs of the transaction banking industry’s “heightened focus on maintaining compliance with increasing anti-money laundering, combating the financing of terrorism, and know-your-customer regulatory expectations”, Baft says in a statement.

The group will essentially focus on developing best practices for banks dealing with financial crime. It will review “red flags” identified by bodies in different regions, and will also identify common challenges. It will then consolidate sound practices into a document to assist trade practitioners. (A similar document was developed in 2008, but risks, regulations and practices have changed significantly since then.)

By agreeing on best practice requirements and implementing shared solutions, banks will be able to lower cost and improve consistency.

Baft president and CEO Tony Burwell comments: “Addressing the challenges of financial crime while balancing the need for trade finance and payment services is one of the most pressing issues for the transaction banking industry.

“Increased regulatory requirements, significant fines for non-compliance, and shifting trade and payment flows have made it incredibly difficult and costly for banks to interdict 100% of the non-compliant transactions from the millions of transactions that support everyday commercial activity.”

Baft’s May conference in California will see the likes of Swift, KYC Exchange Net and Accuity come together to present updates on their particular solutions for dealing with KYC issues.