Bangkok Bank Executive Vice President Pipat Assamongkol said the Bank has launched L/C on Blockchain, an innovation that makes trade finance easier and more efficient. This is Thailand's first full L/C on Blockchain service. Bangchak Corporation Public Company Limited has selected Bangkok Bank's L/C on Blockchain to open L/C with trade partners' banks overseas and it plans to continually use this service for transactions starting from February onwards. The initial Bangchak transaction is also Bangkok Bank's first L/C on Blockchain provided to a business in the oil and gas industry
"This is another major success story for trade finance service's development as it brings in a new technology to support the working process to be faster and more efficient. All processes for this service will be digital and paperless while it will reduce the L/C transaction time from three days to less than three hours. The trade finance transactions are recurrent, so the service will clearly enhance business efficiency"
Ms. Phatpuree Chinkulkitnivat, Senior Executive Vice President, Accounting and Finance, Bangchak Corporation Public Company Limited said Bangchak is committed to drive transformation in the energy business by focusing on continually developing innovation for sustainable business operations. Bringing in Blockchain to upgrade the L/C transaction process for Bangchak's international trade is another major move by Bangchak to increase its operational efficiency.
Joining with Bangkok Bank in using Blockchain technology for electronic L/C transactions via Contour, a leading platform provider, with world class security standards, is another step to enhance Bangchak's international trade transactions as its partners can check transaction details clearly and transparently.
Mr. Pipat said Bangkok Bank is the first and only Thai bank that joined with world leading banks and partners to establish Contour and it has been participating in the service development since 2019. The Bank also trialed Cross Bank L/C on Blockchain on the Contour Network with three major clients at the beginning of 2021, which went smoothly and effectively and met the needs of trade finance customers, both importers and exporters. Subsequently, the service was fully commercialized and launched in November, 2021.
Up to now 20 banks have joined Contour, covering more than 50 countries worldwide in Europe, American, Africa, Middle East and Asia Pacific. A highlight of L/C on Blockchain is that it uses Distributed Ledger Technology (DLT), or the Enterprise Blockchain Platform, which enables customers to conduct all transaction processes digitally, so all trade partners can see real-time data and make transactions quickly, transparently, greatly reducing operational costs compared with the traditional paper process. This is in line with the current and future international trade situation that will require speed and secure transactions.
"The Bank has been dedicated to continually develop financial technology in recent years. This proves that we can adopt technology for practical use in financial services which fully revolutionizes traditional trade finance services. We believe that our experience in continually co-developing this service will play a major role in upgrading Bangkok Bank's trade finance services to be stronger and able to meet needs of both business customers and trade partners overseas. This also enhances our customers' competitiveness in the global market which is Bangkok Bank's key role as a 'trusted partner', standing beside customers in any situation and providing quality financial services, modern technology, experience and business advice to support customers to grow strongly in the future", said Mr. Pipat.
Source: Bangkok Bank
