SINGAPORE (THE BUSINESS TIMES) - DBS Bank has joined Contour's network, which is built on blockchain technology company R3's Corda and digitalises global trade processes such as the creation, exchange, approval and issuance of letters of credit (LCs).
It is the first Singapore bank to do so, ahead of the blockchain-based platform's full launch later this year, DBS announced on Monday (May 11).
Other banks in the network include BNP Paribas, Bangkok Bank, ING, HSBC, Standard Chartered and Citi Ventures, according to the website for Singapore-based Contour.
DBS will be able to tap Contour's digital solutions to provide a fully digital end-to-end LC settlement process for its customers, including the transfer of electronic trade and title documents. This will help to shorten the settlement time, reduce paperwork and simplify complex trade processes.
Corporate customers will also be able to conduct digital pre-issuance negotiations between applicant and beneficiary in real-time, and share this with the bank post-endorsement for LC issuance. This increases the accuracy of LCs issued and, in the event of discrepancies, facilitates quicker resolution, DBS said.
In addition, there will be real-time tracking of transactions on the platform along with a full audit trail, resulting in greater transparency.
"Joining Contour's growing ecosystem of banks and partners aligns with DBS' ongoing efforts to drive greater efficiencies in trade and unlock strategic value for its corporate customers," the lender noted.
The demand for contactless banking amid the Covid-19 situation also makes digitalising trade processes an increasingly relevant and heightened priority.
Contour's chief executive officer Carl Wegner said that as more financial institutions join the beta network, it will be 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," he added.
John Laurens, group head of global transaction services at DBS Bank, said: "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."
DBS shares were up $0.22 or 1.1 per cent to trade at $19.92 on a cum-dividend basis as at 10.31am on Monday.