DBS Bank and Standard Chartered Bank announced on Oct 6 that they have led a workgroup of 12 other banks to create and conduct a digital Trade Finance Registry (TFR) POC.
The registry, which is supported by Enterprise Singapore (ESG) and endorsed by The Association Banks of Singapore (ABS), is set up in a bid to enhance lending practices and improve transparency in commodity trade, says a statement released by DBS.
The TFR POC aims to help banks in Singapore by serving as a secure central database for branches to access records of trade transactions financed in Singapore.
The registry will also help mitigate against duplicate financing from different bank lenders for the same trade inventory, leading to greater trust and confidence among banks and traders alike.
The registry is developed on a blockchain network that is supported by technology provider dltledgers.
The participating banks in this registry are ABN AMRO, ANZ, CIMB, Deutsche Bank, ICICI, Lloyds, Maybank, Natixis, OCBC, Rabobank, SMBC and UOB.
Sriram Muthukrishnan, DBS Bank’s global head of trade product management said that the successful development of the POC within a few short months exemplifies the immense potential of an industry coming together to co-create solutions that enhance the transparency and security of lending practices, and mitigates against the risk of trade fraud.
“Building greater resilience in the industry ecosystem is even more important today as businesses and economies continue to deal with the impact of prolonged trade disruptions. The Trade Finance Registry marks an important step towards fostering greater transparency through collaboration and strengthening lending practices in Singapore’s banking sector while ensuring a secure operating environment for the industry as we progress towards an increasingly digital trade future.”
Sam Mathew, global head of documentary trade at Standard Chartered said, “Driving sustainable trade finance growth and managing risks are core to our strategy. We are pleased to have co-led on this industry-first initiative with our industry peers and dltledgers, and together create a working proof of concept trade registry that can enable trade banks in detecting potential duplicate financing of the same cargoes.”
“Having delivered this in record time from concept to testing, it is testament to the true collaboration between all parties and we hope to further develop the registry alongside ABS,” he adds.
Following the completion of the POC, DBS and Standard Chartered will work with ABS to implement the TFR as an industry utility to enhance trade financing practices within Singapore, before expanding it globally to cover major trade corridors at a later stage.
Going forward, ABS will manage the TFR, supported by a standing committee represented by the ABS Council member banks. Three working groups of banks will be set up to jointly lead the governance, technical development and business scope of the project, and all banks will be invited to join the TFR as members.