Standard Chartered has invested in Contour, which handles letters of credit (LCs) digitally via a blockchain-based open-industry platform, the international banking group said Tuesday.
“Our investment into Contour underscores our commitment to forge partnerships and solve common industry challenges – taking paper out of the process while improving speed and accuracy,” said Lisa Robins, global head of transaction banking at Standard Chartered, in a statement.
“With our footprint across the world’s fastest-growing trade corridors, we have the unique opportunity to support our clients in achieving a more sustainable supply chain, by improving access to financing through paperless trade and simpler processes,” she added.
StanChart didn’t immediately respond to DealStreetAsia’s request for comment on the size of the investment.
Previously, LCs were paper-intensive, and Contour has digitized the process of issuing, confirming and documenting LCs, allowing participants to see real-time updates on the transaction’s progress, the statement said.
Two live pilot tests with large petrochemical clients in Thailand and Singapore showed better transparency, cost efficiency and reduced settlement risks, as well as faster access to working capital, StanChart said.
In August, StanChart said it used Contour to carry out a pilot transaction for PTT Group, PTT International Trading and IRPC Public Company for a shipment of an oil product from Thailand to Singapore. The test reduced the LC processing time to less than 12 hours, the bank said at the time.
The bank was one of the founding members of Contour, which was previously called Voltron. In addition to StanChart, the founders of Contour included are Bangkok Bank PCL, BNP Paribas SA, CTBC Venture Capital, HSBC Investment Bank Holdings, ING Bank N.V., Skandinaviska Enskilda Banken AB, Bain & Co., CryptoBLK Ltd. and R3 Ltd.
Contour is expected to expand to include more banks, technology providers and other trade-finance networks, the statement said. StanChart added it planned to inject its technology for digitizing the bank guarantee process.
The investment into Contour has followed the bank’s other trade-related tie-ups.
In 2018, StanChart tied up with Siemens in an effort to digitise trade finance using a blockchain-based guarantee system. In August, StanChart worked with SAP Ariba on financial supply chain services.
The bank has also made a strategic investment into Chinese supply-chain financing platform Linklogis.
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