Since gaining independence over fifty years ago, Singapore has established itself as a key player in Asia’s burgeoning tech and finance scene. Today, the city-state boasts a plethora of forward-thinking initiatives across the trade finance space. Many of these have informed approaches from other nations, paving the way for how technology can be integrated into the way goods are moved around the globe, to the benefit of both businesses and consumers.
Singapore’s annual Fintech Festival (SFF 2021) is a testament to this progression. The event brings together industry experts from Asia and beyond, to share important views on the future of finance. I attended this year’s festival and was a panel speaker at the ‘Building Global DLT Networks’ roundtable. In this panel, I joined fellow industry leaders to discuss the importance of distributed ledger technology in building global trade networks, the role of interoperability and how it can scale to meet the various needs across different geographies.
At SFF, I also participated in SMBC’s virtual panel event, ‘Making Digital Supply Chain an Accelerated Reality’. Hosted by Shinichiro Yamazaki, SMBC’s Global Head of Trade Innovation & Region Head of Trade Finance, APAC. I joined trade experts from B2B payments software firm, Serrala, to discuss the digital future of supply chains. You can watch the discussion, here.
As Singapore Fintech Festival comes to a close, now is a perfect opportunity to pause and reflect on Singapore’s status as a global fintech hub, and what makes the country a trailblazer in advancing trade’s digital evolution.
Singapore’s central bank, the Monetary Authority of Singapore (MAS) has participated in the development of many initiatives to make trade finance more transparent, equitable and sustainable. Underpinning these initiatives is the use of technology to overhaul the notoriously paper-based trade finance sector. Singapore was the second country in the world to adopt the UNCITRAL Model Law on Electronic Transferable Records (MLETR) into legislation, marking a major step forward for trade digitisation. The city-state also conducted the world’s first digital trade financing pilot between MLETR-harmonised jurisdictions. Contour is proud to have facilitated many digital Letter of Credit (LC) transactions for Singapore-based banks and corporates The country’s DBS Bank, for example, earlier this year began offering digital LCs on the Contour network in four key markets: Australia, China, Hong Kong and Singapore.
There are many emerging technologies that are yet to reach full maturation. The exact way in which they are best applied to solve the complex challenges across global trade is yet to be seen. What we do know for sure is that one of the key obstacles in making trade finance more efficient is getting parties that are naturally competitors to trust each other. Blockchain technology is a powerful tool in providing this trust, offering the assurance that ‘what you see is what I see’.
A digital, distributed ledger can bring together the disparate ‘islands of data’ which currently characterise trade finance. By connecting data from various trading partners in the trade finance workflow, it then becomes a seamless, end-to-end trade solution, making transactions faster and more secure.
Singapore is Contour’s home market, and the ideal hub from which to work with our network of trade partners. Earlier this year, we launched our ‘Future of Finance’ innovation lab in Singapore, whose first project is to explore and develop future trade products based on the ICC’s Uniform Rules for Digital Trade Transactions (URDTT).
We have no doubt that Singapore will continue to be a first mover in bringing many of the benefits of modern technology to trade finance. The nation’s commitment to digitisation in a sustainable and appropriate manner, in close collaboration with regulators, is one which many countries should look to in their own practices. Singapore should be commended for the pivotal role it plays in leading the way in bringing regulation and efficiency to digital trade finance.