UOB, IMDA digitalise SG-China cross-border trade flows
This is expected to speed up the electronic exchange of trade documents.
UOB announced that it has concluded its digital trade financing pilot with the Infocomm Media Development Authority (IMDA) for the digitalisation of Singapore-China cross-border trade flows on the TradeTrust digital utility.
The pilot focused on the electronic exchange of trade documents and managed to lower the turnaround time for the processesing of shipping document presentation and title transfer. It also lowered the transaction costs for businesses.
The pilot consisted of two digital letters of credit transactions involving an electronic bill of lading transaction simulations.
A bill of lading is a legal title document issued to a seller that details the type of goods, ownership, quantity and destination of goods being carried. The traditional trade flow involves manual handling of trade documents among sellers, buyers, carriers, and banks across different geographies. A single trade finance deal could hold as many as 27 parties, with up to 36 original documents and 240 copies.
So Lay Hua, Head of Group Transaction Banking, UOB, said that the pilot was effective in reducing processing turnaround time from days to within an hour. This, according to Hua, highlighted the interoperability of TradeTrust as a paperless workflow.
“With this, electronic bills of lading and other electronic trade documents can be transferred across the ecosystem and the whole trade finance cycle in a fast and seamless manner. We look forward to working with our clients from across the region to enhance their cross-border trade efficiency and to optimise their working capital with greater digital connectivity,” said Hua.
The pilot is a milestone under the Singapore-China Smart City Initiative.