Singaporean banks and ocean carriers have partnered to launch a real-time verification system for bills of lading (BLs), the latest move in the city-state’s bid to use technology to fight trade finance fraud. 

The launch of the tool was announced today by the Association of Banks in Singapore (ABS) and SGTraDex, a platform for transferring trade data securely that went live in 2022. 

It forms part of the Trade Finance Registry, an ABS-owned banking utility in operation since June 2023 that enables lenders to check whether a borrower has attempted to obtain finance more than once for a single trade transaction. 

In addition to duplicate financing checks, lenders can now submit data from trade documents to the registry, which will then match that data with information from shipping companies to verify whether a BL is legitimate. 

“Currently, this is a manual process that involves banks calling or sending emails to conduct such verifications,” the ABS and SGTraDex joint announcement says. 

ABS director Ong-Ang Ai Boon says the partnership will “help to mitigate trade finance fraud, improve efficiency, build trust and enhance connectivity in global trade”. 

The use of forged or recycled BLs has been uncovered in several high-profile fraud scandals, including the 2020 collapse of Singapore commodity trader Hin Leong, which left banks facing losses of up to US$3.5bn. 

In some cases, banks discovered they had financed transactions where no actual shipment of goods had taken place. 

To verify whether BLs are legitimate, SGTraDex uses APIs to connect the Trade Finance Registry with information from ocean carrier data aggregators. 

Singapore-based Portcast, which provides a supply chain visibility platform, has joined the initiative as a data aggregator, while Ocean Network Express is the first carrier to participate in the project. 

SGTraDex says it plans to add other aggregators and carriers as partners, and ABS says around 70% of banks participating in the Trade Finance Registry plan to use the BL verification tool. 

“By leveraging real-time data connectivity, we’re building a future where trade transactions are faster, more transparent and highly reliable for all stakeholders,” says Portcast chief executive Nidhi Gupta. 

“This collaboration lays the groundwork for a truly secure and connected trade ecosystem.” 

Tan Chin Hwee, chairman of SGTraDex, says the tool should also support further digitalisation of trade finance, driving greater efficiency across the industry.