Trade Finance Risk Management

Manage and prioritise trade finance instruments and strategic partnerships to minimise risks in international trade



Competency Area

Trade and Investment Facilitation


Comprehends types of risks in international trade and trade finance solutions

Understands commercial and financial risks in international trade (such as order cancellation, late delivery, delayed payments, shortage of currency, interest rates fluctuations etc.)

Describes risks due to different cultures and political factors in securing delivery, payment and current exchange rate

Understands structured financing products in trade intended to reduce risks due to changes in trade regulations

Identifies challenges in trade finance products adoption and regulatory compliance

Identifies the steps involved in payment under collection approach covered by payment guarantee (Such as FX agreement, payment guarantee)

Documents the challenges facing trade finance in emerging economies (such as closure of banking correspondent relationships post-financial crisis, varying level of demands on local bank)

Guides the trade and financial communities on regulatory compliance requirements (international banking and financial flows) through capacity building activities

Synthesises risk exposure assessment across the portfolio products in consultation with trade sales, credit risk management, operations and legal team

Reviews financing needs and partnerships

Proposes the use of payment terms (such as collection or documentary credit), standard delivery terms (such as Incoterms) and well-structured deal terms to reduce commercial and financial risk

Encourages the adoption of right hedging products to minimise financial risks

Streamlines inter-institutional cooperation and strategic partnerships in addressing the shortage of trade finance in developing countries through working capital and inventory finance solutions

Analyses the financing structures in the supply chain to assess financing requirements

Designs tools that facilitate compliance with new regulatory requirements (such as anti-money laundering and countering the financing of terrorism AML/CFT) and analyze gaps in resources and expertise for implementation

Applies risk management frameworks and practices to identify potential risks and voice risk views in transactions