FinTech: Founding Member Standard Chartered Boosts Investment in Contour, the Blockchain Trade Platform
Standard Chartered invests an undisclosed amount in Contour.
Contour is a global trade finance platform that runs on R3’s Corda blockchain. It specializes in digitally creating, exchanging, approving, and issuing Letters of Credit (LCs). Last week, it announced the success of a series of live pilot tests in 14 countries and a global trial with over 50 banks and corporates.
Contour successfully demonstrated a reduction in the processing times of LCs from 5-10 days to less than 24 hours. It also announced a full commercial launch of the service and appointment of CEO Carl Wegner, according to Fintech Singapore.
“As one of the founding members, the Bank will continue to collaborate with Contour, bringing its expertise and digital capabilities to deliver a faster and frictionless experience for clients accessing trade finance,” Standard Chartered said in a statement.
The blockchain-based solution for an antiquated, paper-based LC system
The bank also reported successful pilot tests of the platform conducted with large petrochemical clients in Thailand and Singapore. These confirmed lower costs, better transparency, and lesser settlement risks. The new system also resulted in a better turnaround of working capital.
“Our investment into Contour underscores our commitment to forge partnerships and solve common industry challenges – taking paper out of the process while improving speed and accuracy,” said Lisa Robins, Global Head of Transaction Banking, Standard Chartered.
Transacting parties in LCs must currently maintain paper records in what is a 400-year old process. The procedure is mostly manual, costly, and highly inefficient because it creates duplication and discrepancies. According to research by Contour, “86% of participants consider traditional LoCs as over-reliant on paper takes too long and is becoming ‘intolerable’ for both corporates and banks.”
Contour was previously known as Voltron. Fintech consortium R3, along with seven of the eight founding bank members of Voltron – Bangkok Bank, BNP Paribas, CTBC, HSBC, ING, Standard Chartered, and SEB – established Contour as a standalone legal entity for the commercialization of Voltron.
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