Why Does Trade Shield Ask for Financial & Banking Information?
? 6 min read 7 questions answered
If you have been asked to provide bank statements, a bank code, or financial statements during a credit application — you are not alone in wondering why. This article explains what Trade Shield requests, why each piece of information is necessary, and how this process connects to the credit assessment that has always taken place — just now handled digitally, faster, and more securely than before.
In this article
A bit of context
Before Trade Shield, when a business applied for credit, a credit bureau report was requested on their behalf. A researcher would then contact the applicant directly — by phone — to ask for bank statements, a bank code, or management accounts, depending on the type of report being run.
This manual process happened behind the scenes, which is why many team members were not aware of it. Trade Shield has not introduced a new requirement — it has digitised and made visible what was always part of a thorough credit assessment.
“We never asked for this information before — why are we asking now?”
The short answer: you were always asking for it — you just weren't the one making the call.
In the previous process, a credit bureau researcher would contact the applicant on your behalf and request the relevant documentation over the phone. This happened as part of the bureau's report generation process and was invisible to most of the team.
Trade Shield brings this step into the credit application workflow — making it transparent, traceable, and consistent across every application. The applicant uploads their documents directly into the platform, eliminating delays, lost paperwork, and manual follow-up calls.
ⓘ For the team: If an applicant pushes back on providing financial information, you can reassure them that this has always been part of the credit assessment process — Trade Shield simply handles it digitally rather than via a phone call.
? Think of it this way
If you applied for a loan at a bank, they would ask you to prove you can afford to repay it — payslips, bank statements, tax returns.
Extending a credit limit for goods or services is no different. Your supplier is not lending you cash — but they are trusting you to pay for what you receive. That trust needs to be backed by the same financial evidence a bank would require. The only difference is the form the credit takes.
Is requesting financial information required by law?
Yes — for consumer credit agreements, the National Credit Act (NCA) places a legal obligation on credit providers not to extend credit recklessly. This means that before approving any credit facility, the provider must take reasonable steps to assess whether the applicant can afford to meet their repayment obligations.
What the NCA requires
✓ Assess the applicant's general understanding and appreciation of the credit agreement
✓ Evaluate their debt repayment history and existing financial obligations
✓ Determine whether they have the financial means to meet proposed repayment terms
✓ Decline or restructure the application if the assessment indicates the credit would be unaffordable
Requesting bank statements, bank codes, and financial statements is how a responsible credit provider fulfils this obligation. Without this information, an affordability assessment cannot be completed — and proceeding without one exposes the credit provider to reckless lending liability under the NCA.
Trade Shield is built to support this process. The platform captures and stores the financial evidence required to demonstrate that due diligence was performed — protecting both the credit provider and the applicant from entering into an agreement that cannot realistically be honoured.
⚠ Reckless credit defined: Under the NCA, a credit agreement is reckless if the provider failed to conduct a proper affordability assessment, or proceeded despite the assessment indicating the applicant could not afford the credit. A finding of reckless lending can result in a court setting aside the agreement entirely.
Why are bank statements requested?
Bank statements are used to run a Bank Statement Analysis (BSA) — an automated assessment of the applicant's real cash flow behaviour. Rather than relying solely on what an applicant declares about their income or turnover, the BSA reads actual transaction data to paint an objective picture of their financial health.
The BSA examines things like:
| ✓ Average monthly credits (income in) | ✓ Average monthly debits (expenses out) |
| ✓ Salary / payroll patterns | ✓ Dishonoured or returned payments |
| ✓ Loan repayment commitments | ✓ Ability to service a credit limit |
This gives the credit assessor a far more accurate view of an applicant's ability to pay than a credit score alone. It is especially valuable for businesses that are newly registered or have limited credit history.
ⓘ Tip: Trade Shield's BSA tool processes bank statements automatically — no manual reading required. The analysis is generated within the platform and forms part of the credit report available to your assessors.
Why is a bank code requested?
A bank code (also referred to as a bank branch code) is used to verify that the applicant's banking details are valid and that the account is active. This is a standard step in the credit bureau verification process.
Specifically, the bank code is used to:
• Confirm the applicant banks at a recognised South African financial institution
• Enable the bureau to verify account-level information against their records
• Support payment risk scoring — some credit models use banking behaviour as an input
• Facilitate future payment or collections processes where applicable
Previously, the researcher requesting the credit report would obtain this verbally from the applicant during the follow-up call. In Trade Shield, the applicant enters this directly as part of their application, ensuring accuracy and reducing the risk of transcription errors.
⚠ Note: A bank code alone does not give Trade Shield or your organisation access to the applicant's banking account. It is used solely for verification and risk scoring purposes.
Why are financial statements / management accounts requested?
Financial statements — which may include annual financial statements (AFS), management accounts, or income statements — are requested when a more in-depth assessment of the applicant's business financial position is required. This is typically triggered for higher credit limit applications or where the bureau data alone is insufficient.
Financial statements allow assessors to evaluate:
| What is assessed | Why it matters |
|---|---|
| Revenue & turnover trends | Is the business growing, stable, or declining? |
| Profitability | Does the business generate enough surplus to service credit? |
| Liabilities & existing debt | What other financial obligations does the business carry? |
| Net asset value | What is the underlying strength of the business? |
| IFRS 9 / ECL inputs | Supports expected credit loss modelling and staging |
Not every application will require financial statements — the workflow will only prompt for them when the credit policy or risk scoring model determines they are needed for a fair and thorough assessment.
ⓘ Tip: Management accounts (interim figures) are acceptable when audited annual financial statements are not yet available — for example, for a newly registered entity or a business mid-financial year.
Is the applicant's financial information shared or sold to third parties?
No. Financial and banking information submitted through Trade Shield is used solely for the purpose of conducting the credit assessment for which it was requested. It is not sold, shared with unrelated third parties, or used for marketing purposes.
Trade Shield processes personal and business information in accordance with the Protection of Personal Information Act (POPIA). The lawful basis for processing financial information in this context is:
✓ Contractual necessity — the information is required to assess and process the credit application
✓ Legitimate interest — the credit provider has a lawful interest in assessing repayment risk before extending credit
✓ Consent — where applicable, applicants consent to the processing of their information as part of the application submission
Applicants have the right to request access to their information, request correction of inaccurate data, and to raise objections to processing. These rights are governed by POPIA and your organisation's Privacy Notice.
ⓘ For the team: If an applicant raises a POPIA-related concern about submitting financial data, refer them to your organisation's Privacy Notice or escalate to your compliance officer. Do not advise applicants to withhold required information.
What happens if the applicant does not provide financial information?
If the required financial or banking information is not provided, the credit assessment cannot be completed. Depending on the workflow stage and the report type being run, one of the following outcomes will apply:
| Situation | Outcome |
|---|---|
| Applicant declines to submit bank statements | BSA cannot be generated; application may be flagged as incomplete |
| Bank code not provided | Bureau verification step cannot be completed |
| Financial statements not submitted | Assessor cannot complete financial analysis; application may be declined or deferred |
In all cases, the credit assessor or approver retains discretion to make a decision with the information available — however, an incomplete submission significantly limits the quality and accuracy of the risk assessment and may result in a lower recommended credit limit or a declined application.
⚠ Note: If an application is blocked due to missing financial information, the workflow may trigger a Correction Request – Incomplete Submission stage, prompting the applicant to resubmit the outstanding documents before the application can proceed.
Summary
Requesting financial and banking information is not a new practice — it has always been part of a responsible credit assessment. Trade Shield has made this process visible, digital, and consistent, replacing the manual phone calls and paper-based collection methods that happened in the background before.
| ✓ Bank statements — for cash flow analysis (BSA) |
| ✓ Bank code — for bureau verification and payment risk scoring |
| ✓ Financial statements — for in-depth business financial analysis |
| ✓ NCA compliance — a legal obligation to assess affordability before extending credit |
Need more help?
The support team is ready to assist
Was this article helpful?
That’s Great!
Thank you for your feedback
Sorry! We couldn't be helpful
Thank you for your feedback
Feedback sent
We appreciate your effort and will try to fix the article