DBS will be expanding its offerings on Contour – a network for global trade – to its corporate clients across Australia, China, Hong Kong and Singapore from April onwards.
The move is made to further push the digitalisation of trade finance in the region’s major trade hubs, says the bank.
DBS was the first Singapore-based bank to join Contour’s beta network. It completed the first fully digital Letter of Credit (LC) transaction on the platform in 2020.
It is now a part of Contour’s production network, where it will offer digital LC transactions for customers in the four regions.
The Asia-Pacific region is key in leading the digitalisation of trade finance, where banks and corporates are seeking to mitigate risk and enhance cost efficiency amid the Covid-19 pandemic.
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Traditional paper-based LC processes have been a “major obstacle” to trade growth and have created “unnecessary complexity, cost and delays,” says the bank.
The digitalisation of LC transactions reduces settlement times and paperwork. It also means complex trade processes can now be simplified.
According to DBS, those on the Contour network have seen, to date, “great efficiency gains” and reducing the process of an LC presentation by up to 90%.
The decentralised network also mitigates the possibility of forgery and fraud opportunities.
“Our partnership with Contour aligns with DBS’ ongoing efforts to drive greater efficiencies in trade and unlock strategic value for our corporate customers,” says Sriram Muthukrishnan, group head of trade product management, DBS Bank.
“We recognise that digitisation is a powerful enabler to simplify the highly complex nature of trade finance, especially for processes relating to letters of credit. Digitising trade processes is also an increasingly relevant and heightened priority for corporates to survive and thrive in the new normal and will form an integral component for resilient trade ecosystems of the future,” he adds.
“The addition of another major Asian bank to our production network highlights Contour’s growing presence in APAC as an industry standard for digitising trade finance documentation. DBS has been an important partner for Contour in our work to support Singapore’s position as a key trading hub and has already participated in a number of successful transactions on our network. We’re delighted to facilitate its transition to offering live services to customers in these four markets,” says Carl Wegner, CEO at Contour.
As at 11.07am, shares in DBS are trading 52 cents higher or 1.8% up at $28.91.
