DBS Bank, a multinational banking firm based in Singapore, is the recent entity to join global blockchain network for digitizing trade settlements called Contour to streamline letter of credit transactions for its customers.
Business news outlet The Business Times reported the news on Monday, May 11. According to the reports, DBS Bank is the first Singaporean Bank to join this Singapore-based global blockchain trade finance network.
By joining Contour, DBS is intended to digitizing its end-to-end letters of credit settlement process through the platform’s blockchain solutions that, according to BDS, will reduce settlement time, decrease the amount of paperwork required, and simplify the trading process.
Furthermore, Contour will enable DBS corporate customers to conduct digital pre-issuance negotiations between applicant and beneficiary in real-time, and share this with the bank post-endorsement for LC issuance that will higher the accuracy of letter of credits issued.
DBS further said that this real-time tracking and audit trails of transactions would increase transparency and help in the event of discrepancies and facilitate quicker resolution.
John Laurens, group head of global transaction services at DBS Bank, commented:
“This is more than simply digitising an historically paper-based service; it’s about transforming the way industries work by providing greater transparency, security and speed to build sustainable trade ecosystems that are able to weather the peaks and troughs of economic cycles and are resilient in times of crisis.”
Contour, built on R3’s Corda, aims to solve the riddle of digitisation of trade and trade finance. The network focuses on elimating the paper work in the creation, exchange, approval and issuance of letter of credits.
The history of trade finance dates back to April of 2018 when eight global banks including Bangkok Bank, ING, BNP Paribas, and HSBC joined together to test and validate next generation technology for trade finance on R3’s Corda platform.
The Contour platform is expected to be launched commercially somewhere in the last part of Q2 of 2020. In March, Contour said that it had completed the successful trial of its platform where it recorded $30 million in letter-of-credit transactions last year.
Carl Wegner, chief executive officer (CEO) of Contour, commented:
“Our network continues to grow. With more financial institutions joining the Beta Network, we are able to showcase the full potential that a blockchain solution can offer to trade finance. Efficiency in the LC issuance process is a vital part of upgrading the industry. Through our network, we can enable banks and corporates to leverage the shared transparency in the platform and manage information digitally which is even more important than ever for the trade finance industry.”
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