How Singapore is simplifying trade with a digital platform
By Yun Xuan Poon
The Networked Trade Platform streamlines international trade and makes finance checks easier for banks.
A trader has multiple documents to get in order before they can ship goods out – cargo insurance, government permits and container bookings are just some of them. Singapore has created the Networked Trade Platform (NTP), which brings together government agencies and more than 30 service providers, to address some of the challenges facing traders and regulators.
At the recent GovInsider Live, Serene Ho, Director of the NTP Office at Singapore Customs, shared how the NTP has shortened the trade process, standardised trade finance applications for traders and given banks more visibility into trade permit data.
Streamlining paperwork processes
As global ecommerce becomes more available, the trade industry is seeing a shift in customer expectations. “They want it now, they want it easy,” said Ho. Besides wanting efficiency, customers are expecting more information – they want to track their parcels so they can know when to expect its arrival, right down to the hour of the day.
A parcel crossing international trade borders typically has to go through 25 parties, including the factory, the warehouse and the shipping line. The entire process generates up to 40 documents, and a lot of the information has to be keyed in repeatedly. “There’s lots of data, lots of digital silos,” said Ho. Having to coordinate with multiple partners also “limits scalability” for traders.
The Singapore government is simplifying this by moving the entire trade process onto a digital platform that “integrates the whole chain of services”. NTP combines services across the public and private sectors to make information – such as government permits, packing lists and invoices – easily available to all stakeholders. This not only saves time, it cuts paper costs, which take up a fifth of shipping costs, said Ho.
Another challenge traders faced was that each bank had different document requirements. “We’ve heard from customers that there are too many portals out there,” said Ho. NTP worked with nine key trade finance banks and standardised the application processes so traders can easily submit all the information via one “multi-bank trade finance” portal on the NTP. Traders can also reuse the information across different banks, making the application process a lot more convenient.
Making trade finance compliance more efficient
Banks themselves have faced a huge challenge: they often didn’t have the latest prices of certain types of goods like clothes and shoes. And so they could not quickly and accurately validate invoices to ship these items. “Is there a real trade going on? What is the price for a shipment of non-commodity goods?” Ho said, for example.
To help the banks, Singapore Customs worked with the Monetary Authority of Singapore to make available data from customs permits with the banks. This will help banks validate the underlying trade and verify prices of non-commodity goods, Customs said. It will also help them better manage fraud and mitigate risks associated with trade-based money laundering. “Traders can give consent on the NTP for their data to be shared directly with the financial institutions of their choice,” said Ho.
The NTP is currently looking to partner with customs of other countries, including China and Australia, to make information exchange for imports and exports more seamless.
The NTP is a great example of how the public and private sectors can work together to increase efficiency and streamline processes. “Where there’s a gap, that’s where the government should work with industries to deliver,” said Ho.