Lloyds


“By accelerating digitalisation, it’s possible to process transactions in minutes or hours rather than days or weeks”“In the 18 months since the passing of the Electronic Trade Documents Act, key benefits have been proven resulting in wider interest and uptake across the industry”


The digitalisation of trade represents a significant opportunity for the UK economy, making trade faster, cheaper, and more secure. As an industry, we are moving away from paper-based processes to a fully digital, data-driven approach. This offers transformational benefits; reducing transaction costs by 80%, unlocking growth for UK businesses, and modernising supply chains.

A Paper-based Problem

As it stands, trade relies heavily on physical documentation, slowing transactions, increasing costs, and exposing businesses to risks such as fraud, loss, and errors. What’s more, it involves a significant administrative burden. A single shipment can involve 50 documents exchanged between 30 stakeholders. Globally, 4 billion pieces of trade-related paper are in transit at any time.

Reliance on paper also affects businesses’ ability to secure finance. Slow document transfers delay verification and shorten the time businesses have access to funding. This challenge worsens the global trade finance gap estimated at $2.5 trillion[1]($22 billion in the UK). By accelerating digitalisation, it’s possible to process transactions in minutes or hours rather than days or weeks. Ultimately, this can reduce costs, improve security, and make trade finance more accessible.

Powered by Legal Change

A key enabler of this transition is the Model Law on Electronic Transferable Records (MLETR). The new law offers a framework for countries to recognise digital trade documents as legally equivalent to their paper counterparts.

So far, 12 jurisdictions – including the UK, Singapore, France, Germany and some US states – have adopted MLETR-based legislation, and many others are working towards similar reforms. Given that 80 to 90% of world trade is governed by jurisdictions in the process of adopting digital trade frameworks, the global transition is underway.

Following the passing of the Electronic Trade Documents Act (ETDA), Lloyds has been leading the digital transformation of trade with ground-breaking and award-winning transactions. By growing our digital documentary trade offering over the last year, we have continued to deliver fantastic benefits for our clients.

Additionally, we have been able to slash transaction times thanks to the complete removal of paper documents. Transactions used to take an average of 30 days from issuance to surrender of the bill of lading. In one case, we have reduced that down to just 2 hours. Our experience also shows us that digitalisation is a one-way street for clients; none of them have returned to the analogue process after experiencing the digital equivalent.

Transforming Trade Together

In 2024, we turned our focus to collaborative transactions with other banks and financial institutions who are ready to embrace digital documentary trade. We executed the first fully digital bill of exchange transaction between two financial institutions. This covered the sale of sugar from a client of Mercore Capital (who arranged for the bill to be drawn) in the Americas to a Lloyds client (who arranged for the bill to be accepted) in the UK. The transaction was completed as a Documentary Collection under the ICC’s Uniform Rules for Collections – Supplement for Electronic Presentations (eURC).

In Q1 2025, Lloyds and Mercore have expanded their partnership to involve secondary purchase of the accepted digital bill of exchange. In these new transactions, Lloyds is purchasing risk from Mercore, allowing increased liquidity for this particular transaction flow. This improved transaction structure offers a practical way for parties who are not executing electronic trade documents to enter secondary participations, purchasing risk under these digital negotiable instruments.

Digital Documentary Trade Across Major Markets

Interoperability is a hot topic in digital documentary trade. As such, we have explored how we can use electronic bill of lading (eBL) solutions to further commercialise digital documentary trade. In 2023, the Centre for Digital Trade Innovation (C4DTI) pilots resulted in a technical connection between Enigio’s trace:original solution and CargoX. Building on this progress, we worked with Enigio on a bilateral interoperable connection between trace:original and TradeGo’s (a leading eBL provider in China with 18 financial institutions onboarded) solution, which used the Digital Container Shipping Association’s (DCSA) interoperable standards. 

Lloyds took part in the first digital documentary trade transaction across this ‘Europe/China digital superhighway’, proving that digital documentary trade can work between major markets. The initial transaction, a presentation under an eUCP Documentary Credit issued by a major Chinese bank for the purchase of wood pulp, was executed seamlessly across the two solutions in 48 minutes. The transaction involved a German carrier and Swedish exporter, alongside the UK Advising Bank and Chinese Issuing Bank and Importer and required no paper documents or couriering. Following this, we saw further movement in this direction with the announcement that two other platforms, Digital ICE Trade and IQAX, developed a bilateral interoperable connection across the Global Shipping Business Network (GSBN) eco-system

The Route Ahead

In the 18 months since the passing of the Electronic Trade Documents Act, key benefits have been proven resulting in wider interest and uptake across the industry. We are on the verge of a revolutionary change in the way trade transactions are initiated, handled across the supply chain, and financed. The ICC, alongside other key industry associations, is well positioned to make this a global reality.  With English Law’s position as the law of choice for 60% of trade transactions and 80% of global shipping transactions, in a world where supply chain disruption is the new normal, harnessing the Electronic Trade Documents Act has the potential to be truly transformational. 

Footnote
[1] 2023 Trade Finance Gaps, Growth, and Jobs Survey | Asian Development Bank

[1] 2023 Trade Finance Gaps, Growth, and Jobs Survey | Asian Development Bank