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A new platform that is hoped will facilitate digital trade and deter fraudsters has gone live in Singapore with more than 70 participants.

The Singapore Trade Data Exchange (SGTraDex) was launched on June 1 by the city-state’s communications minister Josephine Teo, exactly a year after plans for the initiative were first unveiled.

SGTraDex is essentially a data-sharing platform: using APIs, it facilitates the mobility of information, which otherwise would typically be unavailable or cumbersome to access, between various parties involved in trade.

A group of banks, traders, ports, shipping companies and energy firms helped develop the platform over the past 12 months, alongside Singapore’s Infocomm Media Development Authority (IMDA).

One of the main use cases of the platform, at least initially, will be preventing fraud through detecting attempts by companies to fraudulently obtain financing twice from the same cargo or using bogus documents. Instead of having to rely solely on documents presented by a customer in a trade transactions, banks will have access to trade data at its source.

“This helps provide greater transparency and comfort regarding the genuineness of trade,” says Sriram Muthukrishnan, DBS’s managing director and group head of global transaction services product management. “Access to secure, trusted and real-time data will support the long-term growth of trade and trade finance.”

Allegations of fraud at oil trading companies that collapsed in 2020, such as Hin Leong and ZenRock, have contributed to a retreat by many trade finance lenders to a handful of large names in the industry, leaving many smaller traders facing a liquidity crunch.

On the same day of the launch, DBS, one of the platform’s founding participants, announced its first live transaction using SGTraDex, using a digital bunker delivery note for a deal with bunker provider Kenoil.

Fuel bunkering is a major industry in Singapore and it is hoped SGTraDex will slash the time needed for transaction documentation to be gathered and transmitted from several days down to a matter of hours.

The platform’s CEO Antoine Cadoux says: “Digitalisation has transformed many sectors, but in the global supply chain and trade sector, its promise has yet to materialise. The physical exchange of paper remains the norm.”

“We believe that the plug-and-play digital infrastructure we have created at SGTraDex will go a long way to make it easy for all participants to share data under an agreed set of rules. Our goal at SGTraDex is to enable global trade to happen more quickly, more reliably, and with higher integrity.”

Another use case that has already been developed includes using data from the platform’s participants to build end-to-end visibility of container flows, improving utilisation of containers and tackling bottlenecks at warehouses and depots.

SGTraDex participants are already developing a way of using the platform to make green and sustainable trade finance easier by digitising verification data, such as sustainability certificates, and making them more easily accessible for participants along the supply chain.

Efforts to enhance management of demurrage in shipping, through sharing of real-time data, and ship supplies and spare parts through digitising documentation, are also underway.

SGTraDex is using another digital utility in Singapore, the TradeTrust platform, to “provide participants with proof of authenticity and origins of the documents” exchanged on the platform.

Cadoux says SGTraDex underwent “multiple rounds of testing” before the launch. “We are encouraged by our live testing recently and are pleased that more participants are being onboarded every day. We urge others to sign up as early as possible to maximise the benefits,” he says.

The founding banks involved in the project are DBS, OCBC, Standard Chartered and UOB. Energy trader Trafigura and shipping companies Pacific International Lines and Ocean Network Express were also founding members.

SGTraDex is made of two companies: a consumer-facing services arm, which is a joint venture between industry and the Singaporean government, and a separate company that operates the platform’s technology.

Photo credit: SGTraDex