In an effort to speed up the digitization of trade and supply chain financing, a group of international banks has acquired Contour Network, according to a statement released on Tuesday by Xalts, a Singaporean fintech company backed by Accel and Citi Ventures.
In a statement, Xalts stated that it intends to use Contour’s industry-standard workflows and integrations to help businesses and financial institutions in the network communicate and conduct transactions. Xalts is used by institutions to develop multi-party applications for digitisation and tokenization.
With the goal of digitizing trade, eight global banks, including HSBC, Standard Chartered, and BNP, launched Contour as a pilot program in 2017.
Currently, Contour provides digital trade finance solutions to more than 100 international companies, including Rio Tinto and the Tata Group, and over 22 banks.
It was mentioned that global trade exceeded $30 trillion in 2023.
But as QED Investors points out, less than 1% of world trade is now done online, meaning that digitization is still relatively small.
A single transaction may need up to 50 sheets of paper to be exchanged with up to 30 different stakeholders, including importers, exporters, banks, logistics firms, and customs, due to the complexity and variety of regulations involved in cross-border trade.
Xalts is drawing inspiration from Silicon Valley startups like Plaid and Stripe to accelerate digitization in trade and supply chain finance as traditional supply chains reorganize and global trade continues to grow.
“We want to create a Plaid for Trade. Our vision is to expand the scope of Contour’s network which is trusted by banks and corporates, and build it into a rail that enables businesses to access digital solutions for trade and supply chain finance offered by banks, fintechs, and technology partners,
“Combining our platform with Contour’s Network will allow participants to develop and deploy customized solutions quickly,” said Ashutosh Goel, Chief Executive Officer of Xalts.
As per the statement, Xalts will initially concentrate on integrated solutions related to supply chain finance and trade.
Thanks to these, banks, logistics providers, and tech firms will be able to provide businesses with integrated solutions on a single platform.
It is mentioned that a large number of regional and international banks have been attempting to integrate their clientele and global platforms more deeply.
A joint venture between HSBC and Tradeshift to develop embedded finance applications was announced in 2023.
