EBRD and partners promote digital trade

Leading trade finance to its next step of development the European Bank for Reconstruction and Development (EBRD) has facilitated two trial transactions between National Bank of Greece and Citibank on the digital trade finance network Contour.

National Bank of Greece acted as an issuing bank and Citibank as a confirming bank when the lenders completed test digital letters of credit. Both banks are part of the EBRD’s Trade Facilitation Programme.

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 current fragmented 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 achieve a significant reduction in processing time.

The trial was one of several test transactions to be facilitated by the EBRD through different digital trade finance solutions providers. The introduction of inclusive digital solutions is critical to guarantee 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 paper 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 paper documentation, often regulated by national legislation.

The EBRD has designated digitalisation as one of its three key strategic priorities under its current five-year plan as technology is a key enabler of transition. As part of this approach the Bank is partnering with digital solutions 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 we require innovation and progress towards digital economies. Development banks like 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 Citibank.”

Quote from NBG:

The Trade Facilitation Programme (TFP), 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 over 100 partner banks in 30 economies where the EBRD invests and more than 800 confirming banks worldwide.