How TBML Is Reshaping Banking Services — Today and Tomorrow

Trade-Based Money Laundering (TBML) has been around for decades — but the scale, complexity, and creativity behind it today has pushed it right to the centre of global financial-crime discussions. From the FATF’s 2006 paper to the updated FATF–Egmont report in 2020 and IFC/BAFT guidance, the message has been consistent:

TBML is no longer just a compliance issue.
It is a business, customer-experience, and operational-resilience issue for banks.

As global trade expands, payments get faster, and supply chains get harder to trace, TBML now impacts how banks deliver services across trade finance, payments, correspondent banking, and corporate onboarding.

This article breaks down what is changing, how TBML is reshaping banking operations, and what it means for customers.

1. TBML Has Moved From Back-Office to Board-Level Priority

TBML activity is estimated at USD 1.6–2 trillion a year — a staggering figure.

Criminal networks now use:

• mis-invoicing and price manipulation
• phantom shipments
• complex supply chains with multiple intermediaries
• AIS-spoofed vessels
• shell companies and layered payments

Banks today are expected not just to detect suspicious flows, but to understand the underlying trade — documents, vessels, routes, pricing, counterparties, and ownership structures.

This shifts TBML from a “compliance-afterthought” to a core strategic risk that directly influences:

• customer turnaround times
• operational processes
• and long-term banking relationships.

2. More Scrutiny = More Friction for Customers

Traditional expectations like:

• quick payment clearances
• limited trade-document checks
• relying on trusted corridors
• smooth open-account trade

are slowly disappearing.

Because TBML often hides inside perfectly normal-looking transactions, banks are now required to dig deeper, even for routine flows.

a) Slower transaction processing

Banks must validate:

• price reasonableness
• invoice consistency
• shipping routes
• counterparties via sanctions, dual-use goods lists, vessel databases, BO records

This is especially challenging in open-account trade with minimal documentation.

b) More requests for information

Corporates increasingly face requests for:

• purchase orders
• packing lists
• contracts
• vessel details
• third-party payment justifications
• supply-chain visibility

It feels intrusive, but regulators expect this.

c) Tighter onboarding and KYC

Industries considered “safe” earlier — textiles, scrap, grains — are now viewed through a TBML lens.

Customers may see:

• enhanced due diligence
• frequent BO re-verification
• questions on trade flows and warehouses
• checks on trading partners and jurisdictions

3. Banks Are Making Strategic Portfolio Decisions

FATF and IFC guidance highlight a clear trend:
When a bank cannot assess TBML risk confidently, it derisks.

And that directly reshapes which customers, sectors, and corridors banks choose to serve.

a) Exiting high-risk sectors

Banks gradually pull back from sectors such as:

• precious metals
• used cars
• electronics
• scrap
• second-hand textiles
• certain agricultural commodities

SMEs and emerging-market traders often feel this impact first.

b) Stricter correspondent banking corridors

Banks scrutinise:

• nested accounts
• cross-border payment behaviour
• high-risk jurisdictions

This creates delays, raises costs, and sometimes shuts down entire corridors.

c) Rise of “selective financing”

Banks now prefer customers who provide:

• transparent supply chains
• structured ERP/documentation
• predictable pricing
• verified counterparties

Those lacking traceability face reduced limits, higher pricing, or rejections.

4. Technology Investment Is No Longer Optional

Traditional AML modules cannot handle TBML’s complexity — high transaction volumes, unstructured documents, maritime data, and fragmented verification sources.

This is driving large-scale tech transformation across banks:

a) AI-driven document intelligence

Analysing invoices, BLs, packing lists to catch:

• inconsistent quantities
• duplicate invoices
• mismatches between shipping and payment

b) Vessel intelligence and AIS monitoring

AIS “dark activity,” suspicious transshipments, flag-hopping, and shadow fleets now influence trade approvals.

c) Unified KYC + AML + Trade Compliance

Banks are consolidating fragmented checks into a single TBML risk profile per transaction.

d) Perpetual KYC

Triggered automatically when:

• counterparty risk changes
• routes shift
• vessels are flagged
• sanctions lists update

Impact on customers:
They must move toward digital documentation, ERP integrations, e-BLs, structured data, and fewer manual exceptions.

5. TBML Will Force a More Collaborative Bank–Customer Model

The old “submit documents → wait for approval” model is fading quickly.

Banks will require customers to:

• provide structured, machine-readable data
• maintain LEIs
• adopt digital KYC registries
• integrate via APIs
• comply with predictive TBML scoring models

The trade ecosystem becomes data-driven, not document-driven.

6. Customer Experience Will Split Into Two Distinct Groups

Group 1: Transparent, digital-first corporates

These customers will enjoy:

• faster turnaround
• near real-time trade finance
• fewer false positives
• stable correspondent-banking access

Because the bank can trust their data.

Group 2: Manual, opaque, paper-heavy operators

These customers will face:

• delays
• more queries
• higher rejection rates
• increased compliance cost
• derisking risks

TBML pushes the industry to reward digital maturity.

7. The Future: How TBML Will Shape Banking Services

1. Trade Finance Will Be “Risk Scored” Like Credit

Each transaction, corridor, and counterparty gets a TBML score.

2. Correspondent Banking Will Get More Selective

High-risk corridors will require enhanced evidence or pre-approvals.

3. Banks Will Offer “Compliance-as-a-Service”

Including:

• digitisation tools
• vessel-risk data
• pricing validation
• AI-based invoice analysis

4. Real-Time TBML Detection Will Become Standard

Just like fraud analytics today.

5. Customer Education Becomes Non-Negotiable

Training on:

• dual-use goods
• sanctions
• pricing red flags
• third-party payment risk

Venzo Perspective: TBML Controls Won’t Slow Banking — They’ll Redefine It

TBML is no longer a niche compliance concern.
It is one of the largest systemic risks in global banking.

As regulators tighten expectations, criminals innovate, and banks modernise their systems, customers will experience:

• more structured processes
• more data requirements
• more transparency

But the long-term outcome is a healthier ecosystem:

• safer trade flows
• reduced fraud
• better cross-border predictability
• stronger supply-chain integrity

Banks that embrace technology, unify risk intelligence, and work collaboratively with customers will lead the next phase of transformation.

TBML isn’t just reshaping compliance —
it’s reshaping the future of banking itself.