Agreement combines the reach, scale and security of SWIFT, and Singapore’s commitment to trade digitisation and international legal harmonisation.
The agreement will see SWIFT working with Singapore’s Infocomm Media Development Authority (IMDA) to explore the transition of paper documents to digitally-signed assets, transported across the SWIFT platform, with the support of key partners across the ecosystem.
In the future, SWIFT’s community of more than 11,000 financial institutions and corporates in over 200 countries and territories could be enjoying more efficient and cost-effective cross-border paperless trade, without the need for multiple bilateral linkages and silo systems.
The trade ecosystem faces digital disruption and requires open standards, legal harmonisation and coming together as a community to address fragmentation, friction and risks. Our collaboration with Singapore’s global TradeTrust initiative allows us to play a central role in this effort. Creating value for the community remains a core focus, and we are committed to working with the Singapore government towards a shared vision of a frictionless, open, global trade ecosystem underpinned by international standards, and legal harmonisation.
The collaboration is not just about technology. IMDA’s interoperability framework TradeTrust, which connects various platforms such as SWIFT, for the exchange of digital trade documentation, is an important element.
TradeTrust provides proof of authenticity of documents and offers title transfer through open-source software. This functions alongside legal harmonisation to recognise these digital documents. When paired with SWIFT’s ability to securely transport industry standardised electronic trade messaging, scanned hardcopy documentation and digitally signed assets, this will pave the way for the seamless exchange of electronic trade documents around the world.
Some benefits the SWIFT community can look forward to include shorter trade processing times and the opening up of possibilities for innovation, such as new trade financing offerings to the trade community.
International trade is the lifeblood of Singapore’s economy. Singapore is working with various partners internationally to develop an interoperability framework, TradeTrust, for the seamless and efficient exchange of digitalised trade documentation across different communities. We are pleased to partner with SWIFT to further develop a trusted, interoperable and global digital trade ecosystem.
In March 2020, SWIFT embarked on an initial Proof of Value (PoV) with a group of leading banks to explore how current trade processes could be digitised by leveraging and unlocking the power of the SWIFT network. Under the new agreement with IMDA, we will continue to work with these banks to help drive community-wide adoption oftrade digitalisation.
Under the Memorandum of Intent, SWIFT and IMDA will work with a group of leading financial institutions to support the community in its trade digitalisation efforts. Views from some of these financial institutions are captured below:
Sriram Muthukrishnan, Group Head of Trade Product Management, DBS Bank: “Collaboration is vital for the health and resiliency of the global trade ecosystem. We remain committed to collaborating in the development of interoperable digital trade solutions that help break down barriers for businesses of varying digital maturities to conduct trade digitally and seamlessly. DBS continues to engage in game-changing initiatives with like-minded partners such as IMDA and SWIFT to break new grounds.
For instance, DBS worked with SWIFT and IMDA to conceptualise a solution to facilitate the digital transmission of trade documents, including title transfers of electronic bills of lading on the SWIFT network leveraging TradeTrust. Such efforts will not only help generate the momentum needed to effect a global shift from analogue to digital trade systems, but also build on Singapore’s ambition to become a global digital trade hub, facilitating trade flows between businesses and industries across an extensive network of countries.”
Vinay Mendonca, Global Head Product, Propositions & Structuring, Trade and Receivables Finance, HSBC: “An interoperable industry framework coupled with the SWIFT ecosystem could accelerate recent gains that the industry has seen in digitisation through a harmonised digital flow. We are excited to work on this initiative that could scale the digitisation of trade, delivering better working capital management and efficiencies for our clients.”
Merlin Dowse, Global Product Manager, J.P. Morgan: “We’re looking forward to collaborating with TradeTrust and SWIFT. There’s still work to be done to digitise trade documentation globally but we’re optimistic given the successful testing of SWIFT FileAct and integration into our trade processing system at J.P. Morgan.”
Michael Spiegel, Global Head of Trade, Standard Chartered Bank: “We are excited to see SWIFT and IMDA coming together to provide further boost to the digitalisation of documents in trade transactions. Standard Chartered, being a leading trade bank, has been at the forefront on usage of emerging technologies including distributed ledger, to move from paper based trade transaction to digitised transaction with more resilience, efficiency and transparency. We welcome such an effort and are delighted to join the initiative which promises to make paperless trade accessible to many more enterprises globally.”