Financial Terms Glossary
Key definitions for cross-border payments, treasury management, and trade finance.
AML (Anti-Money Laundering)
Regulations and procedures designed to prevent the use of financial systems for money laundering. Starks implements comprehensive AML controls across all operations.
BaaS (Banking-as-a-Service)
A model where banking infrastructure is provided through APIs, enabling businesses to embed financial services into their products without becoming banks themselves.
Corridor
A payment route between two countries or currencies. For example, USD to NGN (Nigerian Naira) represents the US-Nigeria payment corridor.
FX (Foreign Exchange)
The exchange of one currency for another. FX risk refers to the potential for losses due to currency fluctuations.
Hedging
A risk management strategy used to offset potential losses from currency fluctuations by taking offsetting positions in related instruments.
KYC (Know Your Customer)
The process of verifying the identity of clients and assessing their risk profile. Required for regulatory compliance and fraud prevention.
Letter of Credit (LC)
A payment mechanism used in international trade where a bank guarantees payment to a seller on behalf of a buyer, subject to certain conditions being met.
Liquidity
The availability of liquid assets (typically cash or easily convertible assets) to meet financial obligations. Working capital liquidity refers to funds available for operational needs.
Local Currency
The official currency of a specific country. Local currency settlement means paying in the domestic currency of the recipient's country.
Local Settlement
Completing a payment transaction within a country's domestic payment system, rather than through international rails.
Mobile Money
Digital payment services accessible via mobile phones, widely used across Africa for person-to-person transfers and merchant payments.
Repatriation
The process of converting foreign currency back to your home currency and transferring funds back to your home country.
Settlement
The completion of a payment transaction where funds are transferred from the payer to the payee and the transaction is considered final.
Trade Finance
Financial instruments and products used to facilitate international trade, including letters of credit, invoice financing, and working capital loans.
Treasury Management
The management of an organization's liquidity, investments, and financial risk, including cash flow forecasting, currency management, and funding optimization.
Virtual Account
A unique account number assigned to a specific customer or transaction, enabling automatic reconciliation without requiring a separate bank account.