Japan’s Sumitomo Mitsui Banking Corporation (SMBC) has become the latest institution to join Contour’s global network of banks, corporates and ecosystem partners working together to transform trade finance.
Having been a member of Contour’s beta network since last year, transitioning to the full production network signals SMBC’s commitment to digitising trade finance. In doing so, SMBC will be able to provide its customers with a fully digital end-to-end Letter of Credit (LC) settlement process, vastly improving cost and time-saving benefits.
Digitisation is rapidly gaining momentum in trade finance, especially in the wake of the disruption caused by COVID-19. Antiquated paper-based LCs inhibit trade growth by creating unnecessary complexity, cost and delays. Whereas the traditional process for presenting documentation against an LC can take up to two weeks, Contour reduces it to under 24 hours.
Built on R3’s Corda blockchain platform, Contour’s goal is to build a new global standard for trade finance by simplifying and removing barriers in the trade ecosystem, where everyone can collaborate on a common network.
Contour also ensures that this improvement in speed and efficiency does not compromise security for banks and other participants. Its decentralised network achieves this balance by allowing all users to collaborate and share information without one party – including Contour – owning the entire network or controlling the data. Each group on the network is able to keep their own data secure, while still being able to allow the seamless transition of information to present an LC.
Carl Wegner, CEO at Contour said: “The transition of a major bank like SMBC from a beta member to a full production member marks an important milestone as it’s the first bank in Japan to make this shift. We are delighted to see a growing number of banks across the world align with our vision that international trade needs to eradicate paper-based processes. Not only are they extremely outdated but they now pose a significant security risk. A digital solution is no longer a competitive advantage – it is the future industry standard”.
Shinichiro Yamazaki, Global Head of Trade Innovation and Region Head of Trade Finance APAC, at SMBC said: “At SMBC, we see joining Contour as one of the transformative steps to serve our customers in the new digital economy. Contour can provide an efficient and secure digital channel to replace the paper intensive LC flow currently used. This need is heightened by the challenges arising from the COVID pandemic. We are excited to partner with Contour to deliver this innovative solution not only to our customers but also to our banking partners to improve and strengthen the trade finance industry as a whole.”