Banks launch invoice financing tool based on Ledger technology

Singapore banks have reportedly pioneered a first-of-its-kind solution to bolster commercial invoice financing security.

Reports by FTSE World Markets published on Thursday (December 17) said Standard Chartered Bank, DBS Bank and Infocomm Development Authority of Singapore have collaborated and completed their proof of concept around an application that uses distributed ledger technology to enhance security and reduce billing risk and trade finance for banks.

Reports indicate that while trade finance traditionally requires paper-based processes, distributed ledger technology can now digitize the process, while simultaneously improving transparency by authenticating records.

[bctt tweet=”Distributed ledger technology can digitize the invoice financing process.”]

The app provides a mechanism that digitizes invoices into digital assets on a distributed ledger, according to reports. This means businesses and banks can have a single portal through which players can view invoices and statuses that are pending funding.

Distributed ledger technology also reduces the risk of an invoice receiving duplicate funding from different banks, while third parties can also view invoices to verify their authenticity.

According to Jacqueline Loh, Deputy Managing Director for Development and International at the Monetary Authority of Singapore’s FinTech and Innovation Group, the country is strategically positioned to pioneer trade finance security innovations because it serves as a global center for trade and bill financing.

“This COP [proof of concept] demonstrates the innovative spirit of Singapore’s Smart Financial Center to leverage distributed ledger technology to support economic commerce, which is the cornerstone of the Asian economy,” she said.

Reports indicate that in the next phase of this project, its developers will seek to include the participation of new parties, including government agencies, to fuel the commercial adoption of the solution.

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