Krungthai Bank announced it has joined the production network of Contour, the global trade finance network titled Best Fintech in Trade in 2022, to offer a fully digital end-to-end letter of credit (L/C) powered by highly secure blockchain technology. The service, which is now available, will uplift Thailand's cross-border trading and enhance Thai businesses' global trading capacity.
Tawatchai Cheevanon, Senior Executive Vice President, Head of Global Transaction Banking Group at Krungthai Bank, stated that Krungthai, as a leading commercial bank in Thailand, is committed to developing its tech capacity as well as comprehensive, innovative financial solutions in order to uplift the quality of life of all groups of people and customers as well as advancing the Thai economy's sustainable growth, which is in alignment with its vision "Growing Together for Sustainability."
It recently announced its partnership with Contour, a leading global digital trade finance network and the winner of Best Fintech in Trade at Leaders in Trade Awards 2022 hosted by the Global Trade Review (GTR). Contour's network now has 20 banks on board and spans across more than 50 countries worldwide. Krungthai's intention is to enhance the capability of Thai exporters and importers with a blockchain-based, fully digital letter of credit (L/C). The digital L/C will improve the convenience and speed of transactions by eliminating paper-based processes, resulting in reduced cost while upholding international security standards, which will enhance the efficiency of international trade.
Joining Contour's network allows Krungthai's customers to adopt a fully digital end-to-end L/C settlement process which improves the speed of L/C issuance and amendment request for importers as well as payment settlement request for exporters. The digital L/C also reduces steps and errors when requesting an issuance or amendment. With the fully electronic platform, the customers can check an L/C document, track its status in real time, and submit the document for payment collection under the L/C, thus improving speed, transparency, and accountability of the transaction. Powered by blockchain technology, the digital L/C, is highly secure and has minimum risk of L/C fraud. It will also help reduce operating cost and expenses incurred during goods transportation, such as demurrage charges. The digital L/C service has been offered starting from January 2023.
This move is part of Krungthai's relentless effort to develop advanced digital financial solutions and drive the digitalization of the economy and society. The bank strongly believes that this L/C digitalization will give its importer and exporter customers a competitive edge in the global market, which will also strengthen the Thai economy's recovery and sustainable growth as cross-border trade is an important factor driving the Thai economy. According to Krungthai Compass research center, the Thai economy relies heavily on exports, which comprised 61.7% of the country's GDP in 2021. Thailand's export value is on the rising trend with an estimated growth of 7% in 2022 while 15% growth is the estimate for imports. International trade will continue to play an important role in the Thai economy and it is expected that despite growth from overseas, exports will continue to grow, especially in automotive and food industries of which outlook is positive.
Carl Wegner, CEO at Contour said, "Our vision is to create the trade finance network of the future by leveraging technology to streamline and simplify complex trade finance processes. By joining our growing ecosystem of banks and partners, Contour is aligning with Krungthai Bank's efforts to drive greater efficiencies in trade and unlock strategic value for its corporate customers."
If you are interested in the service, please contact your relationship manager or trade specialist (Trade Solutions Team). For further enquiries, please call Krungthai Corporate Contact Center at 02-111-9999.