Ravi Chandran
DBS accelerates trade digitalisation efforts with more ‘industry-firsts’ to drive greater efficiencies for customers
To drive greater efficiencies in trade, DBS Bank has closed another ‘industry-first’ with the completion of the first trade financing settlement through through vCargo Cloud’s CamelONE Trade Finance portal (TFP) – with another two transactions slated to close this week. The inaugural transaction relates to an SGD 4.8 million letter of credit transaction by homegrown steel wholesaler and supplier, Super Steel Pte Ltd. A letter of credit is the Issuing Bank’s payment undertaking against the presentation of complying documents.
DBS completes first trade financing transaction on CamelONE Trade Finance Portal; part of bank’s broader trade digitalisation efforts to provide enhanced support to corporates.
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As Singapore’s first unified multi-bank portal connected to the Networked Trade Platform (NTP) to aggregate trade financing products, small and medium enterprises (SMEs) like Super Steel are now able to conveniently apply for an array of trade finance solutions through the TFP. More importantly, by providing a standardised application form, the TFP eliminates the hassle of having to navigate through different banks’ sites, resulting in quicker application times and reduced human errors.
This, in turn, helps enhance efficiency and productivity for both large corporates and SMEs seeking access to trade financing, and for banks to provide the service more efficiently. In addition, the information and data submitted for other trade purposes on the NTP, such as permit declaration, freight booking and cargo insurance can also be used to supplement corporates’ digital trade applications to banks – maximising digital data reuse.
Sriram Muthukrishnan, Group Head of Trade Product Management, DBS Bank, said, “Trade finance is the lifeblood of commerce but can sometimes be quite manual and complex. By digitalising trade financing services via a one-stop portal, we are able to provide swift, easy and contact-free financing solutions to help our customers enjoy greater peace of mind when it comes to managing their banking needs. This is especially critical now as prolonged geopolitical tensions and trade frictions, along with Covid-19 concerns, have disrupted global and Asian supply chains, affecting the cash flows of many businesses in Singapore and the region.”
As part of the bank’s efforts to digitalise trade across all fronts, DBS has also completed its first electronic banker’s guarantee issuance on the newly-launched Singapore Customs Electronic Bank Guarantee Programme (eBG programme). A banker’s guarantee is a guarantee from a bank, usually issued on behalf of a company, and represents the bank’s irrevocable obligation to make payment, when a claim is made by the beneficiary named in the guarantee. The bank will only ensure that the claim complies with the guarantee terms before it makes payment. A claim is normally triggered by the beneficiary when the company fails in its performance under the contract for which the banker’s guarantee is issued.
The transaction relates to a SGD 49,000 transaction by leading automotive group, Komoco Holdings (Komoco). Launched today, the eBG programme was developed as part of efforts to enhance the banker’s guarantee lodgement process which tends to be highly manual and time intensive. For example, before the launch of the eBG programme, corporates will need to physically deliver the original hard copy of the banker’s guarantee to the Singapore Customs (Customs).
But today by accelerating trade digitalisation, DBS is now able to help its corporate customers send their banker’s guarantee directly to the Customs, and concurrently digitally share data from the banker’s guarantee in real-time through the NTP. This helps cut short the banker’s guarantee issuance and submission process to the Customs from an average of three to four working days, to less than 24 hours.
Accelerating trade digitalisation across multiple fronts
Apart from driving trade digitalisation efforts externally, DBS has also looked within the bank to provide inhouse solutions to enhance support for its corporate customers. As part of broader relief measures, DBS has recently launched the service where all corporate customers can now upload their supporting trade documents onto the bank’s corporate banking platform, DBS IDEAL.
This means that customers will be able to submit trade financing applications online, as well as digitally upload and reload any required documents such as trade contracts, invoices, customs declarations and purchase orders. These applications were previously mainly done physically at trade counters or at bank branches. Customers will also be able to get instant notifications of their application status through email and SMS.
Recently, DBS also provided several relief measures for businesses affected by Covid-19 across the region. On Feb 13, DBS announced that it will introduce a range of liquidity relief measures and other initiatives to help businesses, retail customers and communities impacted by the COVID-19 situation. This relief package included a liquidity relief package for SMEs and retail customers, support for Singaporeans’ education and transport needs and support and care for the healthcare community.
On Feb 26, it announced its second round of relief measures to help businesses in Singapore cope better with the COVID-19 situation. These measures are a mix of financial relief packages and a slew of digital initiatives to enable companies to fast track their digital adoption and transaction fulfilment needs in the face of business continuity measures currently adopted by most companies.
The latest relief measures are:
- Collateral-free Digital Business Loan of up to SGD50,000, disbursed within 24 hours of loan acceptance.
- Trade digitalisation of 11 common trade financing processes to reduce the need to be reliant on physical over-the-counter trade processing.
- 50 free FAST transactions a month to promote reduced physical handling of cheques (up from 30 free FAST transactions a month).
- Webinars and customised teach-ins to train customers on how to use and benefit from the convenience that our new digital capabilities afford.
- Digitalisation of the bank’s popular DBS SME Academy’s training courses so that upskilling and learning can still continue in the safety of customers’ homes and offices.
