Identify Risks Early: Benefits of Automated Credit & Compliance Checks
3 min Read
Companies in the export sector often face the challenge of obtaining accurate and comprehensive information about the financial situation of their customers, especially when these customers operate in different legal systems. Manual credit checks are not only time-consuming but often provide only limited insights into the actual risks and interconnections of a company. Automated systems for credit and compliance checks are the solution.
Key Points at a Glance
- Global corporate insolvencies rose by 10 percent in 2024, 12 percent above the pre-crisis average (Allianz Trade 2025).
- Creditsafe covers over 430 million companies in more than 200 countries. 580 million reports were generated in 2024.
- KYC and AML compliance costs financial institutions worldwide an average of 72.9 million dollars annually (LexisNexis Risk 2024).
- Finance managers spend up to an entire workday on a single credit decision. Automation reduces this to minutes.
- Nearly half of all B2B revenues in Western Europe are affected by payment delays (Atradius 2024).
International business relationships are increasingly fraught with risks. The numbers tell a clear story: Global corporate insolvencies rose by 10 percent in 2024 compared to the previous year and are 12 percent above the pre-crisis average from 2016 to 2019, according to Allianz Trade. In Germany, the increase was even 23 percent, and across the Eurozone, it was 19 percent. A further increase of 6 percent is expected for 2025.
The risk of payment defaults from international business partners is thus on the rise. Nearly half of all B2B revenues in Western Europe are affected by payment delays, with bad debt write-offs remaining steady at 8 percent of all B2B sales. Payment terms have increased to an average of 52 days. Credit and finance managers of export-oriented companies face the task of systematically checking the creditworthiness and compliance of their business partners to minimize the risk of financial losses.
Challenges of Credit and Compliance Checks
Evaluating international business partners is a complex task. Many financial managers struggle to obtain reliable and detailed information about the financial status of customers, especially when these customers operate in different legal jurisdictions. Traditional manual credit checks are not only time-consuming but often provide only a limited overview. According to a Creditsafe survey, 75 percent of finance managers need up to a full workday for a single credit decision. In 63 percent of companies, up to five people are involved in this process.
Traditional checks often cover only basic financial indicators and do not provide deeper insights into a company’s financial stability.
Additionally, financial managers grapple with the increasing complexity of international corporate structures. Corporate entanglements make it difficult to gain a clear overview of a business partner’s actual condition. Financial issues in a parent company can quickly affect subsidiaries and increase the risk of payment defaults. Without comprehensive credit information, such risks are hard to identify.
Alongside credit checks, compliance with regulatory requirements is becoming increasingly important. International business partners must adhere to stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. The costs are significant: In the USA and Canada alone, annual expenditures for financial crime compliance amount to 81.87 billion dollars. Globally, financial institutions spend an average of 72.9 million dollars per year on AML and KYC processes. Automated compliance checks help ensure that all business partners meet regulatory requirements and detect deviations early.
“We have evolved from a credit reporting agency to a data company. The data we hold is used as master data in our customers’ business systems, not just for credit decisions.”
Cato Syversen, Group CEO Creditsafe, The CEO Magazine
Efficient Risk Assessment and Automated Decisions with Creditsafe
Creditsafe provides detailed reports on more than 430 million companies across over 200 countries and territories, offering deep insights into the creditworthiness and compliance of international business partners. The database draws from over 9,000 sources and is updated five million times daily. In 2024, a total of 580 million credit reports were generated. These reports cover not only the financial stability of a company but also provide information on payment capacity and connections to other companies.
By utilizing Creditsafe’s no-code automation solution, companies can automate previously manual decision-making steps based on creditworthiness and compliance data: analyzing payment history, assessing creditworthiness, and evaluating the management of potential customers. Decision-making within the company becomes decentralized. Even employees outside of credit teams can thus make risk-optimized decisions in accordance with company-wide guidelines.
Solutions for Informed Decisions and Risk Minimization
Financial and credit managers of export-oriented companies need reliable, up-to-date, and detailed data to effectively manage their risks. Automated creditworthiness and compliance checks provide a powerful solution that saves time and reduces the risk of payment defaults.
Creditsafe offers customized solutions that can be seamlessly integrated into existing business processes, enabling continuous monitoring of business partners. These systems deliver real-time creditworthiness data and support compliance with regulatory requirements. At the same time, companies can accelerate their decision-making processes through automated workflows and save significant time.
Do you also want to optimize your creditworthiness checks and minimize risks in your international business relationships? The Creditsafe checklist provides valuable tips and further information. Download it here.
Frequently Asked Questions
How many corporate insolvencies were there in Europe in 2024?
Global corporate insolvencies rose by 10 percent in 2024, 12 percent above the pre-crisis average from 2016 to 2019. In the Eurozone, the increase was 19 percent, and in Germany, it was even 23 percent. For 2025, Allianz Trade expects a further global increase of 6 percent.
What does manual credit assessment cost businesses?
According to a Creditsafe survey, 75 percent of finance managers spend up to a full workday on a single credit decision. In 63 percent of companies, up to five people are involved in this process. The annual costs for financial crime compliance in the USA and Canada exceed 81 billion dollars.
How does automated credit assessment work with Creditsafe?
Creditsafe provides credit reports for over 430 million companies in more than 200 countries, drawing from over 9,000 sources. Through a no-code automation solution, businesses can automate credit decisions based on rules: payment history, creditworthiness, and corporate relationships are checked in real-time, eliminating the need for employees to conduct manual research.
What are KYC and AML checks, and why are they crucial for exporters?
KYC (Know Your Customer) and AML (Anti-Money Laundering) are regulatory requirements that obligate companies to verify the identity and business backgrounds of their partners. This is particularly relevant for exporters, as they work with partners in various legal jurisdictions. Automated systems continuously monitor compliance with these regulations and report deviations in real-time.
What risks arise from the interconnections of international business partners?
Financial issues in a parent company can quickly affect subsidiaries and trigger payment defaults. Without in-depth data on corporate structures and intercompany relationships, such risks remain invisible. Creditsafe provides not only credit data but also information on corporate relationships and ownership structures.
Further Reading
- DORA, AI Act, MiCA all at once: Why RegTech will be a mandatory investment by 2026
- CSRD Omnibus 2026: What the EU reform means for SMEs
- Data governance in SMEs: A practical check of the new DGG
Source image: Adobe Stock / Supatman
