Middle East automotive sector sees blockchain first in trade finance – ZAWYA

Middle East automotive sector sees blockchain first in trade finance – ZAWYA

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HSBC has successfully executed a blockchain-enabled, trade finance transaction between Chinese car manufacturer, SAIC Motor and the Taajeer Group, Saudi Arabia’s exclusive agent for MG cars. Conducted on the Contour platform, this is a regional first for the automotive sector and the first transaction of its kind in the Kingdom. 

The Contour platform enabled end-to-end digitisation of the credit documentation required for Taajeer to import a shipment of cars from SAIC in a process that is up to 10 times faster than using physical documents.  

Chaker Zeraiki, Head of Global Trade & Receivables Finance for HSBC UAE, said: “Our digitising at scale means making customers’ lives easier and, with Contour it means we’re cutting costs, reducing risk and speeding up trade. Bringing these benefits to the automotive sector and Saudi Arabia are a measure of our international connectivity and our global leadership in trade banking.” 

Trade finance powers much of global trade and, according to HSBC, distributed ledger technology has the potential to reduce transaction times from between five and ten days to under 24 hours, therefore unlocking working capital and enabling more trade to be conducted between markets. 

Carl Wegner, CEO of Contour said: “This transaction marks an important milestone in the Middle East’s automotive sector, proving that distributed ledger technology is successfully transforming the trade finance ecosystem. We are excited about the potential of wider adoption in this sector, as having a digital trade solution is no longer an option, but the new standard for the industry.”

The use of Contour’s platform also makes the transactions more secure as data shared on the network are indisputable and transparent, reducing the risk of fraud.

Tom Lee, Managing Director of MG Motor Middle East, owned by the SAIC Group, said: “It brings me great joy to continue to offer ‘best-in-class’ service through an integrated supply-chain programme that can make our operations even more seamless. With HSBC as our partner, we will proactively provide solutions to ensure our customers’ demands are met safely and on schedule. I believe that our bright future is filled with opportunities and our customers can rest assured they will be met with consistent high-quality supply from us, anytime and anywhere in the Middle East region.” 

The transaction is also a first in Saudi Arabia where, according to David Leslie, General Manager of the Trade Finance Business at SABB, increased digitisation is aligned to the Vision 2030 initiative to make the Kingdom a regional trade hub. “Blockchain can significantly reduce friction and increase the pace of trade for companies trading with Saudi Arabian entities.” 

As it seeks to digitise the USD53 billion of global trade finance, Contour uses decentralised technology to integrate digital networks for the immediate transfer of trusted data across trade routes and current fragmented ecosystems globally. 

Media enquiries to:

Will Blair

[email protected]

Tony Hannon

[email protected]

HSBC in the MENAT region

HSBC is the largest and most widely represented international banking organisation in the Middle East, North Africa and Turkey (MENAT), with a presence in nine countries across the region: Algeria, Bahrain, Egypt, Kuwait, Oman, Qatar, Saudi Arabia, Turkey and the United Arab Emirates. In Saudi Arabia, HSBC is a 31% shareholder of Saudi British Bank (SABB), and a 51% shareholder of HSBC Saudi Arabia for investment banking in the Kingdom. Across MENAT, HSBC had assets of US$71bn as at 31 December 2021.

HSBC Holdings plc    

HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. HSBC serves customers worldwide from offices in 64 countries and territories in our geographical regions: Europe, Asia, North America, Latin America, the Middle East and North Africa. With assets of US$2,958bn at 31 December 2021, HSBC is one of the world’s largest banking and financial services organisations.

Contour

Contour is a leading digital trade finance network that is building the global standard for trade by bringing together the world’s banks, corporates and ecosystem partners, onto a common, digital, and trusted network. Powered by innovation, trust and collaboration, 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. Contour has been named as a Leader in Trade for two consecutive years at the GTR Awards (2022 and 2021). It was also named Best Trade Finance Solution in 2021 by Treasury Management International. 

www.contour.network  

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