The Saudi British Bank (SABB) has launched a new digital trade solutions package aimed at enhancing letter of credit (L/C) and guarantee processing in international business transactions.

The bank has developed the package in cooperation with the Contour blockchain-based trade platform focused on digitising L/C and local fintech, Bwatech, which develops solutions to digitalise bank guarantees.

Digital first

The Riyadh-based bank claims to be the first Saudi financial institution capable of exchanging commercial documents digitally.

Using a decentralised technology, the bank can simplify L/C management and reduce dependency on paper documents and increase the speed of document settlement in commercial transactions.

By using the Contour platform, transaction security is also improved as the data that is shared on the network enjoys a high degree of protection and privacy, which reduces the risk of fraud.

Automation of bank guarantees

The Bwatech platform boosts the automation of bank guarantees. It aims to replace paper-based procedures with advanced technical methods by linking banks issuing these guarantees with their beneficiaries to expedite the implementation of the issuance and subsequent procedures.

The bank is "happy to leverage the latest technologies such as blockchain and is flexible enough to work with leading fintechs," according to SABB's CEO of corporate and institutional banking, Yasser Al-Barrak. He says the bank is committed to progressing its digital transformation plans.

Partnership with HSBC

In 2019, SABB and its majority shareholder HSBC completed the first blockchain L/C transaction in the Gulf to finance international trade (DC World News, 30 December 2019).

The transaction involved the shipment of homogenised aluminium billets from Aluminium Bahrain (Alba) to Saudi Arabia's Altaiseer Aluminium Corporation (Talco).

An L/C was issued by Talco on a blockchain-based platform using R3's Corda system.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.