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DBS achieves fully digital trade financing settlement on Singapore’s networked trade platform

DBS Bank, in collaboration with Audi Singapore (Audi) and Audi’s local distributor, Premium Automobiles (Premium), completed the first trade financing transaction on Singapore’s Networked Trade Platform (NTP). The inaugural trade relates to a SG$3.5m million letter of credit (LC) transaction for a trade of Audi cars between Audi and Premium.

In the traditional world of trade, car importers such as Audi have to physically present an array of paper-based trade documents to complete a letter of credit transaction. However, by digitalising the process through the NTP, Audi and their retail partner Premium, are now able to submit bank applications, as well as send and receive trade documents online. In turn, this enables DBS to receive and start processing the e-applications in real-time, cutting short the trade financing processing time from about a week to under one working day, yielding greater operational efficiencies for both buyer and seller. In addition, as trade documents are uploaded onto the NTP, all trade participants are able to enjoy real-time updates on the progress of their transaction, enabling them to better plan their working capital needs.

“Technology continues to fundamentally reshape the world of trade and finance,” said Sriram Muthukrishnan, group head of Trade Product Management at DBS Bank. “With digitalisation, trade information is increasingly democratised and interoperability between trade platforms is enhanced, enabling companies around the world to trade more efficiently and seamlessly with each other. The NTP is a landmark initiative that enables disparate client activities to come together in a secure and efficient digital environment. As a bank, we continue to be passionate about ensuring our corporate clients are well-equipped to ride the wave of digital trade innovation globally.”

“Audi is a progressive company and we believe that we should utilise all the advantages of the connected world,” commented Markus Schuster, managing director at Audi Singapore. “We engineer digital solutions in our cars, our mobility services and in all areas of our business process. We look for ways to do things better; with better security, greater accuracy, more efficiencies and greater benefits to our customers and partners. That’s why we are keen to use the platform.”

“This initiative aligns with the bigger objective of our company’s initiatives in achieving business efficacy and efficiencies,” added Lee Hoe Lone, managing director at Premium Automobiles.

“Digitalising a traditionally paper-centric trade ecosystem requires support from like-minded industry partners who embrace technology and change,” said Serene Ho, director of Networked Trade Platform Office (NTPO). “NTPO congratulates DBS Bank, Audi Singapore and Premium Automobiles on completing its first trade finance transaction on NTP. NTP will continue to work with financial institutions and industry partners to realise Singapore’s vision of a paperless trade ecosystem.”

The first transaction marks an important step towards transforming documentary trade, of which domestic letters of credit constitute around US$150bn of Singapore’s trade flows, according to SWIFT. DBS, Audi and Premium are currently working on the second trade on the NTP valued at SG$2.8m.

 

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Trade & FSC Management
Financial Supply Chain Platforms
Trade Finance
Cash & Liquidity Mngm in Asia-Pacific
Asia
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