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Customs Analytics: The foundation of intelligent operations

Discover how agencies can leverage data with customs analytics to take an insight-driven approach to action.

Overview

The access that governments have to data is plentiful, but determining the best way to get the most value from this information isn’t always clear. Given the sophisticated, evolving threats customs agencies deal with every day, it’s especially critical that they leverage big data to make informed decisions.

Predictive analytics reveals critical data insights that enable customs agencies to act proactively to predict and manage non-compliance or boost levels of enterprise productivity. The use of customs analytics provides a key step to move agencies into a mode of intelligent operations, providing a foundation for building customs agencies that are geared for the future. Given the pace of change and strenuous demands of global trade, customs agencies can pursue the benefits of intelligent operations fueled by predictive analytics, which can result in a more nimble, proactive, and effective agency if applied across the entire customs value chain.

Background

Today’s shifting global trade patterns and economic climate often leave customs agencies with the resources to do little more than focus on operating with an effective, up-to-date risk approach. Customs analytics can help customs agencies realize a higher return in terms of focusing resources and risk interventions, thereby increasing the prevention of non-compliance and revenue uplift in the most cost-effective manner. Rather than manually adapting to trader activity and patters, customs analytics allows customs agencies to move from responding to trader risk and revenue patterns to predicting them.

Having a focused customs analytics capability can also inform day-to-day risk and operational decisions, allowing the agency to achieve the best possible outcomes for a reduced cost. Where agencies continually analyze data in real time and identify insights that inform operations, customs analytics can function much like an electronic “laboratory.” To help determine whether or not the insights should be applied, parameters can be defined. This method is powerful in detecting risk and anomalies and yields higher compliance levels.

Analysis

To foster intelligent operations, there are three important areas where customs analytics can be applied:

  1. Registration and accreditation – Gaining better insight into the entities that customs agencies register and accredit is an important area where the agency can use data and advanced customs analytic techniques to determine the likelihood of these entities having a high potential level of non-compliance.

  2. Risk management, enforcement and audit – The most powerful benefits of customs analytics are in the area of managing risk. Agencies are able to identify new patterns of risk that are not obvious based on trade history, and can learn about the risk triggers that are no longer relevant and those that have been proven. Customs analytics solutions can also significantly increase the identification of potentially illegal factors and risk rules, be used to identify specific enforcement activities, and inform the selection of audit cases.

  3. Collections – Predictive analytics enables customs agencies to learn from historical activity to predict trader behavior for various revenue collection activities. By better understanding their trader base and payment patterns, customs agencies can increase the rate of revenue collection as compared to using a generic approach for all.

Recommendations

Customs analytics can stimulate productivity and efficiency by enabling the agency to intelligently deploy skills and resources to get the right skills in the right place at the right time. For example, a customs agency might have a 20 percent hit rate at a specific port of entry for high value textiles that are known to be undervalued. The agency can assign the relevant capacity and skills to that port by using customs analytics to predict high volumes of potentially high risk transactions, achieving a significant increase in that port’s hit rate. Workforce productivity in specific areas, such as tariff determination for certain commodities, can also increase as customs is able to track the turnaround times and efficiency of staff.

A good way for agencies to begin capturing the power of customs analytics is with a small, single solution that has a reusable outcome, which can provide a compelling business case and serve as the incentive to develop new analytics functions for other areas within the organization.