Trade Finance Advice

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MonetaGo On The Driver’s Seat at Singapore’s Trade Finance Registry

MonetaGo is all set to build a Trade Finance Registry for the Association of Banks in Singapore (ABS) (TFR). TFR will connect bank information silos to prevent duplicate financing fraud.

According to my opinion, the TFR will help secure trade data from Singapore’s foreign and local banks. It will connect to trusted information sources to verify the data. This, in turn, will reduce the likelihood that banks will finance the same trade transaction multiple times or that borrowers will lie about their information. This, I think is in favor of the banks as they will automatically gain integrity in their clients’ and trade financing deals.

The Background of the Project

The TFR project was launched in 2020 to rebuild trust in Singapore’s commodity trade industry. The project was led by Standard Chartered and DBS Bank and involved 14 international financial institutions and ABS. A pilot was run in June using a platform from Singaporean technology company DltLedgers.

We are all aware that banks use easy-to-fake documents, limiting how much financing they can provide. Banks currently offer trade financing by researching customers and checking trade flow checks. Because these checks are only done within a bank or bank network, banks can’t ascertain if a trade has been financed multiple times—leading to the possibility of “round-tripping”, whereby the same transaction is financed at various banks. However, banks don’t share information, making them vulnerable to this type of fraud.

Since the discovery of large-scale fraud in the global trade finance sector, many experts have been discussing ways to find and stop this type of crime. To fix this problem and strengthen Singapore’s trade finance sector, the Association of Banks in Singapore (ABS) has initiated a selective tendering process. This process will allow banks to compete for the right to provide trade finance products and services to businesses in Singapore.

MonetaGo’s TFR to the Singapore’s Trade Finance Sector’s Rescue

Some, including me, doubted the TFR’s ability to clean up Singapore’s trade finance sector, despite the two lead banks’ confidence on its ability to do so . However, ABS solicited bids and selected MonetaGo as its registry technology provider.

The new TFR user interface was developed with the Singaporean financial technology company GUUD. It connects to MonetaGo’s Secure Financing solution’s global hash registry, which checks for full or partial matches and validates trade data with trusted sources like tax authorities. This helps financiers know that the transaction is genuine.

The dltledgers solution uses blockchain, but MonetaGo’s TFR uses a secure computing environment instead. The fintech company recently said blockchain doesn’t work for its global use case.

MonetaGo has developed a new technology that allows banks to share information about financing and payments without violating data protection rules. This technology, called TFR, uses cryptographic hashing to provide visibility into what other banks have financed or agreed to pay for. This is a valuable tool for banks in Singapore, where regulators need to keep a close eye on many different financing risks.

The ABS is pleased to have MonetaGo develop the TFR. This will help protect against banks financing duplicate trade transactions, which builds trust between lenders and borrowers. After go-live, the TFR will be given to ABS and its chosen operator. They will use their experience in this niche area and the global hash registry to find fraud across borders.

Also Read: IPUs: The Associated Values & Issues of Using Them in Trade Transactions

MonetaGo’s TFR technology Wins

I’m glad that my doubts have been proved wrong. MonetaGo’s TFR technology has won the national industry mandate, solidifying its reputation as the world’s leading trade finance deduplication technology provider. This will make trade finance in Singapore much more efficient, cutting down on double financing and ensuring that the rest of the world has faith in the risk of trade fraud.

The director of ABS, Ong Ai Boon, has said they are pleased to have chosen MonetaGo to develop the TFR. They took advantage of MonetaGo’s experience in this niche area and used their global hash registry to find fraud across national borders. CEO and founder of MonetaGo, echoes Boon’s thought. MonetaGo’s technology stops duplicate financing worldwide, and the company is the first to offer a global solution to trade finance fraud caused by duplicate funding.

MonetaGo’s Secure Financing solution was recognized as the Best Fintech Startup in Trade at the GTR Leaders in Trade Awards 2022; the Finest Trade Finance Solution there at AMTD DigFin Innovation Awards throughout Hong Kong Fintech Week 2021; and at the IBS Intelligence Global Fintech Innovation Awards 2021, the Best Bank-Fintech Partnership will be chosen.

MonetaGo’s Secure Financing platform went live in 2018. In September 2018, the company tested its solution with Swift’s API-enabled infrastructure to connect to over 11,000 financial institutions. The company claims over 3 million transactions.

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