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In a significant stride towards enhancing cross-border trade, the Monetary Authority of Singapore (MAS) and the National Bank of Cambodia (NBC) have initiated the Financial Transparency Corridor (FTC) between the two nations. This groundbreaking digital infrastructure aims to streamline financial services and bolster trade, particularly among small and medium-sized enterprises (SMEs) in both countries.
The announcement was made during a commemoration event at the Istana, Singapore, attended by Singapore’s Prime Minister Lawrence Wong and Cambodia’s Prime Minister Hun Manet.
The FTC represents a consent-based digital network that connects financial institutions (FIs) in Singapore and Cambodia. This network is designed to enhance data accessibility, enabling FIs to conduct more accurate credit risk assessments. Consequently, this facilitates greater availability of financing options for SMEs engaged in cross-border trade. The initiative is spearheaded by Proxtera Pte Ltd, a Singapore-based fintech company specialising in digital infrastructure and financial technology solutions.
“The start of the FTC, with an initial set of financial institutions from Cambodia and Singapore, will support greater access to financial services for SMEs through the exchange of SME financial data on the FTC digital infrastructure. This will create greater business opportunities for our SMEs and participating financial institutions,” said MAS Managing Director, Chia Der Jiun.
The first batch of participating FIs has been onboarded, marking the operational launch of the FTC. These institutions have already commenced information sharing and financing through the FTC.
The initial phase of the FTC is just the beginning. Subsequent phases will focus on increasing the volume of transactions and the number of participating financial institutions. There will also be an exploration of green finance and trade finance opportunities, further enhancing the trade capabilities between Singapore and Cambodia.
In July 2023, MAS and NBC signed a Memorandum of Understanding (MoU) to collaborate on this initiative, underscoring their commitment to fostering financial cooperation and economic development.
“The FTC exemplifies the shared vision of the NBC and MAS to support information flows for businesses, in particular SMEs, through enhancing financial trust data for financial services between Singapore and Cambodia. This will promote better access for SMEs to finance beyond borders,” said NBC Governor, Dr. Serey Chea.
This initiative is part of broader efforts by MAS and NBC to enhance financial infrastructure and promote economic growth. The MAS, as Singapore’s central bank and integrated financial regulator, is committed to fostering a robust financial sector through prudent oversight and by promoting Singapore as an international financial centre.
Meanwhile, NBC, Cambodia’s central bank, aims to maintain monetary stability and supervise the country’s financial institutions effectively.
The FTC is expected to play a crucial role in this vision by providing a secure and efficient platform for financial data exchange, ultimately fostering a more integrated and cooperative financial ecosystem in the region.
The launch of the FTC is a pivotal development in the financial relationship between Singapore and Cambodia. By leveraging digital infrastructure to enhance financial transparency and accessibility, the FTC aims to catalyse increased trade and cross-border financial services, particularly for SMEs.
This initiative not only strengthens economic ties between the two countries but also sets a precedent for future digital financial collaborations in the region. As the FTC evolves, it promises to unlock new opportunities for businesses, driving sustainable economic growth and fostering deeper financial integration.
