Remapping the Global Trade Space

Contour’s network-based blockchain offering could finally move trade finance out of the dark ages

With a Tier 1 bank-supported global network built around R3’s Corda blockchain, and interoperability with essential shipping and trading networks, Contour is ratcheting up the digitisation of trade finance. TMI had no hesitation in making it the outright winner of the 2021 Technology & Innovation Award for Best Trade Finance Solution.

Technology & Innovation Awards

Trade Finance Solution

Since being founded as Contour in January 2020, the organisation has created a global decentralised trade finance network of banks, corporates, and ecosystem partners that are working to transform trade finance. It has moved in impressive style, currently listing more than 80 clients including Bangkok Bank, BNP Paribas, DBS, CTBC, HSBC, ING, SABB, Standard Chartered, SEB, SMBC, Rio Tinto, Xiamen ITG, ArcelorMittal Nippon Steel India, Vale, and British American Tobacco Bangladesh. Its partner list is equally impressive, having joined forces with companies including Bolero, IntellectEU, essDOCS, Chinsay, TradeCloud, Mphasis, CargoX, ThoughtWorks, TIS INTEC Group, MineHub and Global Shipping Business Network (GSBN) among others.

The platform, which works for a local bank or corporate in emerging markets as well as it does for a global trade finance bank or a multinational corporate in more developed markets, started life as a project formed by leading trade banks in 2018. It was launched at that year’s SIBOS event in Sydney with a digital LC solution, but has moved in great leaps and bounds. Its network has grown to include 16 banks in more than 50 countries. Most significantly, Contour’s CEO, Carl Wegner, says its recently formed Innovation Lab was created to aid expansion into the widely used open account trade space. This would be a dramatic improvement for corporates currently beset by slow and risk-laden paper-based processing.

Restless development

The Contour platform was initially trialled by banks and corporates in 17 countries, across sectors including commodities, petrochemicals, energy, metals, retail goods, and textiles. It went into a commercial beta phase as a standalone legal entity in January 2020 and transitioned to a live production environment by October that year.

The platform is built on R3’s Corda DLT. This enables the development of a network where all participants keep their own data while transacting and sharing information securely with other participants on the network in real time.

Negotiable instruments such as LCs that are registered on blockchain are acceptable in certain jurisdictions only; in others, documentation is required to be printed on paper and signed. A new legal framework therefore had to be created to enable the use of digital documentation. Contour’s members worked collaboratively to develop a specific rulebook and membership agreement. The rulebook works alongside existing International Chamber of Commerce (ICC) Uniform Customs and Practices (UCP) for documentary credits. Contour’s Innovation Lab will explore and develop new product offerings under the ICC’s new Uniform Rules for Digital Trade Transactions (URDTT).

Contour’s interoperability with shipping networks (eBL/port/customs) and trading networks gives corporate clients a much-needed end-to-end experience across trade, finance, execution, and delivery elements. In testing, the network has proven that processing times can fall by as much as 90%, from an average of 10 days to under 24 hours end-to-end.

Partnering for success

Contour understands that there is still a long way to go to bring this sector into the digital age, and that this includes extending reach into key regions. It had already delivered the first paperless renminbi-denominated deal in the iron ore industry in May 2020. In 2021, it expanded its footprint in Asia, announcing a partnerships with locally-based system integrators in China, Japan, Thailand and Vietnam. The aim of these partnerships is to help domestic companies and their global trade partners integrate with the Contour network, and extend their business reach abroad, by providing technical services. And then in August 2021, Contour announced its partnership with the GSBN.

GSBN is a not-for-profit blockchain-based trade data utility platform that enables supply chain participants to work collaboratively. Its product, Cargo Release, enables digital sharing of verified logistics and cargo data. Partnership with Contour creates a ‘network of networks’ that could finally deliver straight-through processing for all participants involved in trading, financing, and shipping goods around the world.

With its blend of cutting-edge technology, accessibility, significant banking partners, and a willingness to work with other networks to achieve the same laudable aim, TMI is delighted to present Contour with the 2021 Technology & Innovation Award for Best Trade Finance Solution.

Addressing the win, Wegner comments: “We’re delighted to have received such a prestigious industry accolade, capping off what has been a hugely successful 12 months at Contour. In the space of only two years, we have formed a corporate base of 16 banks with our network being used in over 50 different countries. This Award is testament both to our hardworking team and the impact our network has had on global trade by making access to finance far more secure and inclusive.”