Contour, the global trade finance network, is entering live production, uniting buyers, suppliers and banks on the world’s first global, decentralised, digital trade finance platform that is open to all geographies and industries.
Contour’s solution delivers a streamlined digital application for trade finance over a distributed ledger network, which allows parties to manage their own data while transacting and viewing shared information seamlessly and securely with their trading partners and service providers.
The move into production follows an extensive period of design, development and testing by over 80 banks and corporates, with trials in 17 countries, and transactions spanning commodities, petrochemicals, energy, metals, retail goods and textiles. The focus throughout this process has been to increase the accessibility of trade finance through an improved and intuitive user experience, while maintaining a secure network that will meet the needs of the strictest requirements.
New and existing users will now start the process of migrating to the live production environment to execute transactions on the Contour network, built on R3’s Corda technology, a technology designed to meet the needs of the global trade finance community.
Trade finance provides not only financing of goods or services in a transaction, but also facilitation of the transaction itself and risk mitigation for the unique risks of cross border commerce. Unfortunately for this community, the types of trade finance that provide the most significant benefits, such as letters of credit (LCs), are still largely paper and process-driven, creating significant barriers for global trade growth, adding complexity, cost, and delay for counterparties.
Banks and corporates will start using Contour by focusing on this Letter of Credit (LC) process as one of the oldest and most important payment methods in global trade, but also one of the worst user experiences. During testing, Contour was able to reduce the processing time for LCs by up to 90%, from an average of 10 days to under 24 hours after the presentation of supporting digital documentation.
As the world adapts to social distancing and remote working in a post-lockdown world, the use of paper-based processes will become increasingly challenging to conduct.
With the trade finance market predicted to reach USD 79 billion by 2026, the Contour network has a major part to play in facilitating this growth with an efficient, modern and suitable alternative to the existing, duplicative and laborious trade finance process.
Carl Wegner, CEO at Contour, said: “We owe our thanks to the global network of banks, corporates, shareholders and technology partners, who have collaborated to deliver this network. Together we have designed and built the digital future for trade finance.
“The potential efficiency gains from automating trade finance processes are enormous in terms of human labour, cost and effectiveness, but also safety. The traditional methods of trade finance are paper and process-driven, adding complexity, cost, and delays to both banks and corporates.
“The timing could not be more prescient. The pandemic and subsequent lockdowns have amplified the need to find more effective methods of conducting trade, reducing the sheer volume and level of contact points, streamlining processes, reducing costs and improving efficiencies.
“Together, we are enabling the instant flow of trusted data across the world’s trade routes and fragmented ecosystems, creating a streamlined future for businesses.”