Singapore: DBS Bank Embraces Contour Trade Finance Blockchain to Digitize Banking Operations
Singapore-based DBS bank has joined blockchain-powered trade finance network Contour for increased digitization of global trade processes including the creation, exchange, approval, and issuance of letters of credit (LCs). This, according to a report by The Business Times, May 11, 2020.
DBS Bank Leverages R3’s Corda Blockchain
Blockchain’s utility and potential for reshaping the banking space business is well-known. From enabling rapid transactions and settlements to hassle-free loan disbursement, distributed ledger technology (DLT) has come a long way in establishing itself as a force to be reckoned with in the banking industry.
In the latest development, Singapore-headquartered DBS Bank has joined the enterprise-geared Contour network built on top of the R3 Corda blockchain. The move aims to reduce redundant paperwork, streamline complex trade processes, and digitize the bulk of the bank’s operations, including the issuance of letters of credit.
Most notably, some of the other industry-leading institutions that have joined the Contour network include BNP Paribas, Bangkok Bank, ING, HSBC, Standard Chartered, and Citi Ventures.
DBS Bank stated that by being a part of the Contour blockchain network, its customers will be able to conduct digital pre-issuance negotiations between the applicant and the beneficiary in real-time before sharing such information with the bank post-endorsement for LC issuance. This mechanism will essentially increase the accuracy of LCs issued. It will also lead to quicker discrepancy resolution, should they arise.
Commenting on the development, DBS Bank said:
“Joining Contour’s growing ecosystem of banks and partners aligns with DBS’s ongoing efforts to drive greater efficiencies in trade and unlock strategic value for its corporate customers.”
The Need of the Hour
The ongoing COVID-19 crisis has accentuated the need for a wholly digitized banking system in place which could reduce the dependency on paperwork and, subsequently, help establish a through-and-through contactless banking infrastructure.
Contour’s CEO, Carl Wegner, noted that as more players join the beta network, it will be able to “showcase” the full potential that a blockchain solution can offer to trade finance. Wegner stated:
“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.”