- Through the project, SEB seeks to minimize the time consumed in completing LC transactions.
- The platform allegedly replaces the current paper-based process with a digital solution.
- Reportedly, the platform provides an interface that allows the seamless sharing of information.
SEB, a leading Swedish bank has created its own part of an international blockchain trade finance platform. The bank unveiled this news via an official press release on December 1, noting that it had set up its own production environment under Contour, a global blockchain-based platform for trade finance transactions, which went live at the start of October this year.
Per SEB, the production environment leverages blockchain technology, helping it ease bank processes. At the moment, the bank is running a test environment, which is entering its beta phase before the upcoming launch of the live production environment.
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According to the press release, the project involves a platform that seeks to minimize the time consumed in processing transactions pertaining to Letters of Credit. Per SEB, the platform can potentially reduce lead times by up to 90%, reducing the amount of time needed to complete a transaction from an average of 10 days to less than 24 hours. According to the bank, the new platform would replace the current paper-based process with a digital solution.
Marina Sandquist from Trade Finance and a member of the team working on the platform’s implementation at SEB said,
“Using this technology, all parties get a common interface and can access all information simultaneously. This replaces SWIFT and the need to send each other physical mail.”
Developing a global platform
Per SEB, it has been involved in the development of the Contour platform since its outset. The first step in the platform’s development was five years ago when the bank partnered joined an international banking consortium comprising leading banks such as Bangkok Bank, BNP Paribas, CTBC, HSBC, ING, Standard Chartered, and Citi. This coalition resulted in the formation of R3, a US-based company, which later created a blockchain infrastructure platform dubbed Corda.
SEB has been a co-owner of R3 since 2017. Per the press release, a project started the development of a trade finance solution on the Corda platform. Reportedly, Contour put this solution into global operation. Kristina Söderberg, Venture Capital, and Helen Seeman, global product manager for Trade Finance, Transaction Services, will represent SEB on the company’s board.
A sector with vast potential
To date, more than 80 banks and firms in 17 countries have already tested the technology in simplifying transactions involving commodities, petrochemical products, energy, and metal among others. As such, SEB believes that the technology’s potential is massive.
Per Sandquist,
“The trade finance market is expected to amount to 79 billion dollars by 2026. According to the original estimates, about 40% of this trade will use Contour’s blockchain technology by then.”