Singapore’s DBS Bank said this month it would start offering digital Letter of Credit transactions on the Contour blockchain platform in four key markets, Australia, China, Hong Kong and Singapore.
The Contour trade finance platform went into production in October and HSBC went live in December. We believe DBS is the second bank to go live, with the other 17 member banks still in the beta phase.
Contour claims efficiency gains, saving as much as 90% of the processing time for a letter of credit compared to manual processes. The end-to-end digital process also helps to prevent fraud by validating identities.
“We recognise that digitisation is a powerful enabler to simplify the highly complex nature of trade finance, especially for processes relating to letters of credit,” said Sriram Muthukrishnan, DBS Bank Group Head of Trade Product Management.
“Digitising 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.”
The company was keen to emphasize the sustainability aspect by reducing the need to send documents around the world via courier.
“The addition of another major Asian bank to our production network highlights Contour’s growing presence in APAC as an industry standard for digitising trade finance documentation,” said Contour CEO Carl Wegner.
Contour uses enterprise blockchain Corda and was founded by seven banks, Bangkok Bank, BNP Paribas, CTBC Holding, HSBC, ING, SEB, and Standard Chartered. Since incorporation, the banking network has expanded to nineteen, including Alfa Bank, Bahrain’s Bank ABC, Bank of China (Hong Kong), Citi, DBS Bank, Vietnam’s HD Bank, Saudi’s ITFC, Thailand’s Krungrsi, Bangladesh’s Prime Bank, Saudi’s SABB, SMBC and Standard Bank.
Meanwhile, DBS has a wide range of blockchain activities. In trade finance, it was an early and major adopter of Singapore’s dltledgers trade finance blockchain. It was also the first Asian bank to launch on Ant’s Trusple trade finance network. And it has its own supply chain finance blockchain for Chinese enterprises.
In other areas, it launched the regulated DBS Digital Exchange for cryptocurrencies and other tokenized assets with plans for security token offerings. And it’s part of an initiative with JP Morgan and Temasek for a multicurrency interbank payments network that leverages blockchain and the JPM Coin technology.
