National Bank of Greece acted as an issuing bank and Citi as a confirming bank when the lenders completed test digital letters of credit. Both banks are part of the EBRD’s Trade Facilitation Programme (TFP).
Contour uses decentralised technology to offer seamless integration with market-leading digital document systems and other digital networks, enabling the instant flow of trusted data across the world’s trade routes and fragmented ‘trade ecosystems’. By digitising the end-to-end exchange of information and streamlining the process for the issuance and confirmation of letters of credit, all trade participants are able to reduce processing time significantly.
The trial was one of several test transactions to be facilitated by the EBRD through various providers of digital trade finance solutions. The introduction of inclusive digital solutions is critical to ensuring that local banks across the EBRD regions are not left behind in the digital transition.
The global coronavirus pandemic has highlighted the urgent need to move away from paper documents in trade transactions. Across the EBRD regions, such operations still rely almost exclusively on hard-copy documentation to process payments and clear the release of goods to importers. Processing typically requires significant levels of in-person staffing to review hard-copy documentation, often regulated by national legislation.
As technology is a key enabler of transition, the EBRD has designated digitalisation as one of three main priorities under its current five-year strategic plan. As part of this approach, the Bank is partnering with digital solution providers and banks to support digitalisation efforts in trade finance within and beyond the regions where it invests.
Francis Malige, EBRD Managing Director, Financial Institutions, said: “Trade is the bloodstream of the global economy and to future-proof it requires innovation and progress towards digital economies. Multilateral development banks such as the EBRD have an important role to play in the digital transition, especially in trade finance. There is a need for industry players to come together and develop innovative and scalable solutions and we are pleased to facilitate these test transactions on Contour between National Bank of Greece and Citi.”
Paul Mylonas, National Bank of Greece’s Chief Executive Officer, said: “National Bank of Greece’s steadfast goal has always been to lead the Greek banking industry into the rapidly evolving trade finance landscape, leveraging the latest global banking initiatives and our strong collaboration with strategic partners such as the EBRD and Citi. We have prioritised digitalisation in trade finance as one of the most critical targets within our bank’s transformation programme. By taking part in Contour’s trial transactions, National Bank of Greece has the opportunity to assess how trade finance will work in future and to leverage its expertise in product development to offer innovative, value-adding solutions to the Greek market.”
Valeria Sica, Global Head of Trade Product Development at Citi, commented: “Citi is delighted to have partnered with the EBRD and National Bank of Greece in the execution of the trial transactions. Our investment in Contour is one of our strategic initiatives to drive digitalisation and positive change in the global trade industry. Transforming the documentary trade process by enabling the use of digital documents and secure peer-to-peer communication between banks, importers and exporters is what we aim to achieve with Contour.”
The Trade Facilitation Programme, launched in 1999, aims to promote foreign trade to, from and among the economies in which the EBRD invests. Through the programme, the EBRD provides guarantees to international confirming banks and short-term loans to selected banks and factoring companies for on-lending to local exporters, importers and distributors. The EBRD’s TFP currently includes more than 100 partner banks in 30 economies where the EBRD invests and more than 800 confirming banks worldwide.
