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The digital revolution that is changing the way commodities are traded, stored, collateralised and sold is giving birth to a culture of collaboration and transparency that previously did not exist among counterparties.
Indeed, the central theme at this year’s Sibos conference in Amsterdam, the blue-chip gathering of the world’s top executives in banking and finance organised by SWIFT, focuses on how to best embrace digital transformation while mitigating risk and elevating sustainability.
In a move underscoring the shift toward greater collaboration among counterparties, heavy hitters in commodities trading, banking, and storage recently injected investment capital into Singapore Trade Data Exchange (SGTraDex).
SGTraDEX is a government-backed not-for-profit platform based in Singapore, created to streamline and secure trade flows, which was recently supported by Veridapt, a leading digital commodities hardware/software monitoring solutions company.
Digitisation of trade finance transactions via platforms such as Veridapt’s provides counter parties—typically, but not limited to, banks, traders, and terminals—with a one-stop collaborative tool.
This, in turn, ensures trade flow information is secure and accurate, illustrating how these new initiatives are the architects of the digital revolution.
Veridapt CEO David Thambiratnam said, “Veridapt is a technology company, and we believe if you create the right solution, the world will beat a path to your doorway, and adoption will happen.”
In a nutshell, digitisation means greater reliance on the interpretation of common data to make decisions. This means successfully putting everyone who is part of a deal on the same page.
Antoine Cadoux, CEO of SGTraDex Services, said, “When we talk about trade digitisation, it’s a team sport.”
Elsewhere, recent high-profile cases of commodities fraud across oil, agriculture, and metals are pushing security to the top of the sector’s ‘must have’ list.
“Digitisation is of paramount importance to us,” Loh Wei, CEO of Jurong Port Universal, the largest independent terminal in Asia-Pacific, told a conference in September.
Wei added, “The first thing about inventory positioning is to assure our customers, primarily traders, that their confidential inventory position is safe with us, whether it is us taking custody of their oil or the data that is associated with this oil.”
Indeed, there is growing recognition that the transparency of information that flows between counterparties is the oxygen that drives the sector.
Thambiratnam said, “The need for security in all aspects of commodities has never been greater.
“One of the benefits of collaborations such as the one between Veridapt and SGTraDex is that counterparties now have verification every step of the way, greatly mitigating risk of double financing and other fraudulent behaviour.”