Today, a new independent global network to digitise and modernise the USD 18 trillion trade finance market has been launched under the new brand – Contour.
The launch follows a series of ground-breaking live pilots in 14 countries and a global trial with more than 50 banks and corporates, which reduced processing times for Letters of Credit by over 90%, from 5-10 days to under 24 hours.
Contour now moves into full commercialisation of its offering and has established itself in Singapore as a fully independent network and is inviting banks and corporates to join its beta network.
Contour is built on R3’s Corda blockchain and retains the support and expertise of the R3 team. It is led by Carl Wegner, a trade finance veteran who joins following a successful tenure building R3’s presence across Asia.
The network is focusing initially on Letters of Credit (LoCs), which are issued between banks, typically across country borders. They serve as a guarantee for payments between two companies or entities who want to trade goods or services with each other.
The 400-year-old process for agreeing, issuing and tracking LoCs is largely manual, inefficient and costly. Each party must keep and verifying its own separate paper records, creating duplication and discrepancies. Contour digitises LoCs on blockchain, helping banks and corporates save time and money by reducing old fashioned, duplicative processes.
While historically recognised as an excellent risk-mitigation mechanism, research by Contour reveals that 86% of participants consider traditional LoCs as over-reliant on paper, takes too long and is becoming ‘intolerable’ for both corporates and banks.
Carl Wegner, CEO, Contour said: “The opportunity cost in trade finance is huge. Trillions of dollars in commodities, products and services are transacted daily, but the sector is still characterised by slow, duplicative and expensive processes. Contour delivers a network where trusted information is shared in real-time, effectively digitising Letters of Credit across all users in the transaction.
“We are indebted to the community of banks and corporates who have collaborated with us to validate our solution which delivers genuine, measurable value as well as process improvement around Letters of Credit. With the launch, Contour is now available to provide a full commercial service to organisations looking to enhance their trade finance practices.
“We are now focusing on scaling the network with more banks, corporates and partners, and look forward to continuing to collaborate with our growing community.”
Click here to learn more about our blockchain-based clients.