Cybersecurity & AFC Compliance Risks Remain High on Shipping’s Agenda

Singapore freight forwarders – Star Concord

[By: DA-Desk]

When processing disbursement accounts (DAs), senior executives across the maritime landscape have highlighted cyber risks and anti-financial crime (AFC) compliance checks among their top concerns, a recent survey by DA-Desk has highlighted.

The World Economic Forum’s Global Risks Report 2023 revealed “widespread cybercrime and cyber insecurity” as both short-term and long-term global risks. Indeed, cybersecurity, particularly within the anti-financial crime compliance landscape, is becoming more complex due to advancements in technology, as well as evolving regulations and jurisdictions. With the international nature of maritime, more shipping companies are now finding themselves vulnerable to cybercrime, with financial risks, such as phishing and laundering scams. The majority ranked AFC compliance as a top concern, with four key areas of concern including scams changing remittance details, maintaining confidentiality, sanctions compliance and fraud prevention.

Information Security and Fraudulent Transactions
Given the large amount of sensitive financial transactions involved in shipping disbursement systems, the potential impact of cyber threats and non-compliance on cost efficiency, operational disruption and reputational damage is detrimental. Ensuring the security and confidentiality of data is paramount to prevent unauthorised access, data risk and identity theft.

In a recent case study, highlighted by DA-Desk, a fraudulent message with a slightly different email address to the registered user was spotted when managing a port call payment. Their AFC team took immediate action to verify the identity of the sender, thus confirming the fraudulent action. They alerted the concerned customer to prevent further fraud and prevented the potential loss of more than USD25,000.

Having the Right Resources for Cybersecurity and Compliance Checks Compliance with IMO’s guidelines on maritime cybersecurity and financial reporting standards requires shipping companies to implement robust cybersecurity controls, maintain accurate financial records and report suspicious activities to regulatory authorities. Non-compliance with regulatory requirements can result in financial penalties, legal liabilities and reputational damage for shipping companies.

The time and manpower involved to continuously monitor every aspect of a port call, including every appointment, every proforma disbursement account (PDA) and every final disbursement account (FDA), are understandably not something that shipping companies can handle themselves. What if the time involved in keeping information up to date with potentially hundreds to thousands of agents and counterparties around the world could be freed up to focus on driving the business forward?

Digital solutions are looking to streamline the process for shipping companies and reduce the risk of financial cybercrimes. For example, DA-Desk enables companies to automate and streamline due diligence, mitigate the risk of fraud and provide evidence of regulatory compliance, supported by a team of experts monitoring global trading and regulatory developments. Moreover, with a database that supports more than 200,000 port calls per year, DA-Desk continues to evolve to changing cyber threats, enabling the system to highlight ongoing financial risks more efficiently. Crucially, given the sensitive nature of online financial transactions and related data, digital solutions offer a greater degree of confidence and security for ship owners and managers to ensure the risk of cybercrime is mitigated and AFC compliance ensured.

Dionysis Tzelepis, CEO of DA-Desk, noted, “Prioritising cybersecurity awareness and AFC compliance resilience with the right tool, shipping operators can mitigate the risks posed by cybersecurity and AFC compliance at each port call, ensuring their operational, financial and reputational integrity and continuity in the current highly pressured and regulatory landscape.”

Go to Source