ABS launches Trade Finance Registry to counter trade finance fraud
28 July 2023
On 23 June 2023, the Association of Banks in Singapore (“ABS”) launched the Trade Finance Registry (“TFR”), an industry utility that will securely maintain a centralised record of trade finance transactions in Singapore and counter trade finance fraud. The 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. ABS states that it will enhance trust and confidence among banks and traders and strengthen Singapore’s role as a key trading hub.
Key features of the TFR include the following:
- Removing information asymmetry: 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 if any of the new transactions are found to be duplicated, this will trigger notifications in near real-time for further action.
- Data encryption: 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.
- Trade authenticity validation: TFR will also improve the transparency of trade financing transactions by enhancing their ability to validate authenticity of trade, through application programming interface (API) connections to the Singapore Trade Data Exchange (SGTraDex), a public digital platform that facilitates trusted and secure sharing of data between supply chain ecosystem partners.