now loading...
Wealth Asia Connect Middle East Treasury & Capital Markets Europe ESG Forum TechTalk
TechTalk / Treasury & Capital Markets
DBS Bank and Contour broaden digital trade offerings
Digital letter of credit capabilities offered in four Asia-Pacific markets
The Asset 22 Apr 2021

As part of efforts to digitalize trade finance in Asia-Pacific, DBS Bank has expanded its offerings on Contour’s trade finance network to corporate customers in four key markets in the region.

DBS is the first Singapore-based bank to join Contour’s beta network and completed the first fully digital letter of credit (LC) transaction on the platform last year. The bank has now moved from Contour’s beta network to its production network to offer streamlined digital LC transactions for customers across Australia, China, Hong Kong and Singapore from this month.

Built on R3’s Corda, Contour’s network focuses on digitizing paper-based trade finance processes, including the creation, exchange, approval and issuance of LCs, which are often cost-intensive and time-consuming.

Asia-Pacific is leading the digitization of trade finance as banks and corporates seek to mitigate risk and enhance cost efficiency in the wake of the challenges caused by the Covid-19 pandemic. Traditional paper-based LC processes have been a major obstacle to trade growth and created unnecessary complexity, cost and delays.

DBS says that by joining Contour, it will be able to provide a fully digital end-to-end LC settlement process for its customers in Australia, China, Hong Kong and Singapore, including the transfer of electronic trade and title documents.

This helps shorten settlement time, reduce paperwork and simplify complex trade processes. To date, those on the Contour network have seen great efficiency gains, reducing the process of an LC presentation by up to 90%, according to DBS.

Contour’s decentralized network also reduces forgery and fraud opportunities as it validates all identities on its secure network and leverages its technology partners to match trade documents to real-time data, greatly reducing the chances of fraudulent activity.

Traditional trade uses trillions of pieces of paperwork and millions of courier legs, and this has a significant impact on the environment. Thus, Contour offers a cleaner, more efficient and sustainable option that allows companies to reduce their carbon footprint.

Sriram Muthukrishnan, group head of trade product management at DBS Bank, says: “Our partnership with Contour aligns with DBS’ ongoing efforts to drive greater efficiencies in trade and unlock strategic value for our corporate customers. We recognize that digitization is a powerful enabler to simplify the highly complex nature of trade finance, especially for processes relating to letters of credit. Digitizing trade processes is also an increasingly relevant and heightened priority for corporates to survive and thrive in the new normal and will form an integral component for resilient trade ecosystems of the future.”

Conversation
CG Lai
CG Lai
CEO
BNP Paribas China
- JOINED THE EVENT -
Webinar
Changing China: Embracing innovation to build better treasury
View Highlights
Conversation
Taie Wang
Taie Wang
chief business development officer
Hang Seng Indexes Company
- JOINED THE EVENT -
Webinar
Developing strategies supporting sustainable investing
View Highlights