Singapore, June 24: The Association of Banks in Singapore (ABS) on Friday launched an industry utility that will securely maintain a centralized record of trade finance transactions in Singapore, according to a media release from ABS.
Launched at the ABS's 50th-anniversary dinner on June 23, the Trade Finance Registry (TFR) is supported by key trade financing banks in Singapore. This industry initiative aims to mitigate the risk of duplicate financing for the same underlying trade and will enhance trust and confidence among banks and traders, and strengthen Singapore's role as a key trading hub.
TFR will remove the information asymmetry faced by banks and facilitate the detection of duplicate financing. Participating banks will register new trade financing transactions on TFR, and notifications will be triggered if any of the new transactions are found to be duplicated in near real-time for further action.
Only information on corporate customers will be provided to the TFR. In addition, data on the TFR is hashed into an encrypted format. As such, matching of duplicate trades can be done without exposing the banks' underlying data fields to other participating banks.
TFR will also improve the transparency of trade financing transactions by enhancing their ability to validate the authenticity of trade, through API connections to the Singapore Trade Data Exchange, a public digital platform that facilitates trusted and secure sharing of data between supply chain ecosystem partners.
Director of ABS Ong Ai Boon said: "The launch of TFR is a testament to the collaborative spirit and collective focus of the banking industry to address issues of national importance. ABS is pleased that in bringing the industry together, we have created a utility that will bolster the confidence of all stakeholders in undertaking trade finance in Singapore."
Marcus Lim, assistant managing director of the Monetary Authority of Singapore, said: "Collective action is needed to effectively deal with the risk of duplicate trade financing, and we are supportive of this industry initiative."
TFR will be an important tool to strengthen banks' risk management capabilities, thereby bolstering trust in Singapore's trade finance ecosystem, he added.
Source: Xinhua