Joshua Kroeker, Chief Product Officer at Contour, provides a glimpse into the future that the global trade network is building.


At Contour, we believe in a future in which global trade lifts communities out of poverty, connects cultures and bridges economic gaps. To achieve this positive future – and achieve it sustainably – the only path forward is the expansion of trade finance and an increase in its accessibility.

Ultimately, trade finance will need to become much simpler to provide and access. To us at Contour, this necessitates trade going digital, but the industry has found this easier said than done.


The path to the future

“Real generosity towards the future lies in giving all to the present.” – French philosopher Albert Camus.

The future of trade finance will be full of intuitive, digitally-native and standardised solutions embraced by all. But to make that a reality, we need to act today to move our industry forward. Drawing on the lessons from our collective missteps, we must go on an inclusive journey that provides value at every step.

Too often, technology platforms try to change too much too fast or build solutions that will only add value in an imagined future world. We believe that all solutions must be focused on what they can do to solve a problem today, however small, and then progress together on that journey forward. With this approach, a platform can expand the value and the network as it grows, adding features and functions incrementally as the industry increasingly accepts it.

Letters of credit (LCs) are the perfect starting point. It is common to hear that the path to digitisation is to move away from traditional products such as LCs and adopt new, untested methods of payment for international trade. But LCs are not the problem inherently – it’s the paper-heavy manual process. The benefits of LCs are too great to abandon. They provide an internationally recognised, tried-and-tested standard for risk mitigation and dispute resolution critical to global trade, as well as a data standard that can be applied in all regions of the world.

Contour is leveraging this foundation and addressing the pain points in the process via collaborative workflows on its decentralised network and removing paper through integration with the wider trade ecosystem. As a result, Contour turns one of the least efficient methods to trade into one of the most efficient. We are not only unlocking value from existing trade but creating new opportunities as well. However, we cannot do it alone.


The intersection with the physical supply chain

A letter of credit’s promise of risk mitigation hinges on a secure transfer of title through trusted intermediaries from the seller through to the buyer. Today, that basis is in the form of original paper bills of lading. Without digitisting this bill of lading, all other efforts to digitise will fall short of the efficiency gains expected from a digital network.

At this time, shipping carriers and other participants in the physical supply chain are beyond the scope of Contour. This is why an open and inclusive network interoperating across the industry is the only way forward. There are many existing, and a few new participants, offering an electronic bill of lading (eBL) solution that is interoperable with Contour. These are mutually-beneficial relationships as trade finance workflows need eBLs, and eBLs need trade finance workflows.

The latest entrant came from the announcement that R3, the creator of the Corda technology that Contour uses, has purchased an existing eBL solution. They are currently migrating the technology to Corda and will soon launch Corda eBL, a legal and technical software development kit (SDK) to enable solution providers to offer eBLs in their own trade business network.

We urge that the industry looks to platforms like Contour not just in isolation but thinks of what combination of networks they need to join to get the most benefits from digitisation today and in the future.


The future for trade finance

Contour plans to be not just the network of today but the network for tomorrow. We are quickly turning our attention to that future vision as our network scales on the proven foundation of letters of credit.

Much like eBLs are the key to unlocking value from trade finance products today, the future of trade finance requires improved linkages to the wider trade world.

Trade and trade finance are intrinsically-linked industries, but with data trapped in their respective silos, we plan to develop trade finance workflows and services that can bridge these two worlds.

Together, this end-to-end process is no longer a trade finance product – it becomes a Trade Service.

A Trade Service may include elements of a trade finance workflow, such as what Contour is delivering today, but it will integrate the workflows with sources and consumers of data across the trade ecosystem, and then deliver it custom-tailored to a client – for each and every transaction.

This is a major shift away from an off-the-shelf product to a highly-tailored, fine-grained controlled instrument for finance and risk mitigation. Trade Services will be personal, providing solutions to fit the unique situation of a transaction, instantly and in real time.

With a global decentralised network of banks and corporates, and with deep integrations to both the physical supply chain and banking systems, the possibilities for Contour’s new Trade Services are endless.


A vision of a Trade Service

A letter of credit today provides risk mitigation across many areas: corporate risk, fraud risk, bank risk, country risk, currency risk, and so on. But if a seller only wanted to pay for a risk management solution for country risk, could that be offered? Instantly? This is our vision with Contour Trade Services.

The vision is the same for working capital. If a buyer only needs financing for 13 days against the risk of an end buyer not paying while the goods are insured in the Port of Rotterdam, they should be able to get a 13-day loan against that exact risk, within that business day.

That is not the world we live in today.

Of course, risk and loans are just the beginning, as our trade services change for a dynamic world and offer an ever-expanding array of value-added solutions. International trade agreements could be scanned for relevant points to revise landed cost calculations, epidemic outbreaks can be avoided so they do not become pandemics, and new market competitors can enter and compete without barriers.

The world will undoubtably be more complicated, and yet the interfaces and tools will never be simpler. Welcome to the future of Contour Trade Services.


How will we build this?

Before we start with the answer, there is a bigger question to ask. We believe that this question is “who owns your data”? Data is the most valuable commodity in the 21st century, and it will empower corporates and individuals to not only improve efficiency and risk management but also to achieve sustainability goals and increase inclusiveness of trade finance. To get there, the answer to that question must be “I do” for every bank, corporate and trade ecosystem participant in the world. At Contour, we do not want or ask for our members’ data – it is far too valuable.

Trade services will produce immense data sets, yet for individual ownership this data must be distributed across the globe and owned by its members. Yes, there must be a network operator and application providers to provide the connectivity, but these organisations must only have access to the minimum data permissioned to them and not a byte more. Better still, they must leverage new technologies such as Conclave’s confidential computing to provide services without accessing any data at all.

For banks, Contour’s personalised Trade Services will enable them to provide a new category of tailored solutions to strengthen client relationships and build new ones.

This is where the oft-quoted trade finance gap can start to be effectively removed, by reducing the cost of providing trade finance and increasing the quality of data to better understand and price risk.

For corporates, Contour’s Trade Services will provide more choice, and the ability to manage working capital and risk with fine-grained control without constant manual input and management, paying only for the services they need when they need them.

This is the future Contour is building, with more banks and corporates now joining to enjoy the benefits of the solution today, and to participate in the journey to build tomorrow.