BANKS in the Republic can now better tackle trade finance fraud with a new automated digital tool that checks the authenticity of bills of lading – supporting documents commonly used to apply for trade financing – within the Association of Banks in Singapore’s (ABS) Trade Finance Registry (TFR).
Currently, this verification process is manual, requiring banks to call or send e-mails to conduct checks. The new tool, known as the bill of lading genuineness check, allows banks and carriers to carry out direct, real-time verification of trade documents.
Developed through a collaboration between the TFR and the Singapore Trade Data Exchange (SGTraDex), the tool seeks to improve financial transparency and support trade especially for small and medium-sized enterprises looking for trade financing from banks and financial institutions.
ABS director Ong-Ang Ai Boon told The Business Times that the tool serves as one of several verification tools to help banks assess the authenticity of bills of lading, complementing their broader fraud detection and risk assessment measures.
She said: ”Banks see the potential benefits of digital verification, particularly in reducing reliance on manual checks. As more carriers and data providers join the network, with both TFR and SGTraDex actively working to expand participation, the more impactful this solution will be in fostering a more transparent and robust trade finance ecosystem.”
Launched by ABS in June 2023, the TFR is a national banking utility designed to improve the transparency and integrity of trade finance in Singapore. SGTraDex is a public-private partnership that operates a neutral digital highway for trade data sharing.
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How it works?
The tool relies on a secure, end-to-end data connection between the TFR, SGTraDex, carrier data aggregators and ocean carriers – enabling banks to retrieve data points from carriers quickly and automatically.
Portcast and Ocean Network Express (ONE) are the first carrier data aggregator and ocean carrier, respectively, to join this initiative.
The process involves banks submitting relevant trade document data points to the TFR for duplicate financing checks and bills of lading verification. SGTraDex then routes the verification request to carrier data aggregators, such as Portcast, which retrieve the necessary information from carriers such as ONE.
When asked about the security measures in place, Ong-Ang noted that the integrity of the bill of lading genuineness check is “underpinned by having information at source directly from the carriers, making it less likely to be compromised by middlemen with fraudulent intentions”.
She also highlighted that the TFR adheres to the Monetary Authority of Singapore’s technology risk management and cyber hygiene guidelines to ensure data security, system reliability and resilience against manipulations, while SGTraDex ensures data sharing is consent-based and encrypted.
To date, around 70 per cent of TFR participant banks are set to use the genuineness check as one of several avenues to verify their bills of lading, which are transferable documents that represent ownership of goods in transit, and integral in facilitating the maritime shipment of goods.
The tool is part of the TFR’s road map, building on its first capability – the duplicate financing check – which has been supported by 40 major trade financing banks and has processed more than 18,000 queries to date.
Additionally, the genuineness check plays a key role in SGTraDex’s trade finance physical-to-digital twinning initiative, aimed at digitising data exchanges between banks, corporates and logistics providers.
Tan Chin Hwee, chairman at SGTraDex, said: “We look forward to working with more carriers and data aggregators to enhance connectivity and drive greater efficiency across the industry.”
