Building on Barclays’ partnership agreement with the Department for Business and Trade, a new trade digitisation task force, co-chaired by Barclays and ICC United Kingdom, was established in 2023 to promote the digitisation of trade. The UK’s minister for exports, Malcolm Offord, officially launched the group at the House of Lords in mid-July.
Jaya Vohra, Global Head of Trade & Working Capital Product and Client Management, Barclays, outlines the objectives of the task force, the broader implications of the recent establishment of a legal framework for electronic trade documents in the UK, and the importance of collaboration and standardisation to maximise the benefits of digitisation.
Pull quote
“The ultimate goal of this initiative is to increase access to trade finance, which plays a really vital role in driving trade and economic prosperity and the desired growth at the SME level”
Objective of the Taskforce
A major impetus for this initiative is the Electronic Trade Documents Act (ETDA), which became law in July 2023 and took effect in the UK in late September. The Act presents a significant opportunity, and the time is right to bring together stakeholders to harness its benefits.
We assembled this task force with a view to making recommendations to the UK government on specific areas where we think it can help make trade easier, more efficient and more cost-effective, and therefore not only help UK exports but also drive benefits globally to trade. Our focus areas include steps towards commercialising the Electronic Trade Documents Act; optimising digital documentation for smoother anti-money laundering and know-your customer processes; combatting trade fraud; advocating for favourable capital rules that recognise the low-risk nature of trade; and fostering international collaboration with key trading corridors.
The ultimate goal of this initiative is to increase access to trade finance, which plays a really vital role in driving trade and economic prosperity and the desired growth at the SME level.
Supporting growth, exports and access to trade finance
The beauty of trade is that everything we do is connected to the underlying exchange of goods and services. However, the challenge arises from trade’s paper-intensive nature, rendering it operationally inefficient for corporates, logistics providers and financiers. Digitising trade processes and solutions can break this cycle. It will enable further access to Trade Finance for SMEs, alleviating risk and cost barriers. This transformation holds the potential to truly revolutionise the trade landscape.
Transitioning to digital trade
The International Chambers of Commerce have championed a number of great initiatives and have put together common standards for the industry to use. The ICC Digital Standards Initiative has published a Key Trade Documents & Data Elements Report, among others, in an effort to accelerate the development of a harmonised digital trade environment.
Companies can take advantage of such initiatives and embark on their digital journey with a number of practical steps, as they prepare to leverage the opportunities provided by switching to digital trade. This would include engagement with banks like Barclays, trade bodies such as the International Chamber of Commerce and the Department for Business and Trade. Communication and leveraging available expertise are crucial for navigating topics like trade digitisation and there is a robust support network available for UK businesses.
An objective of the taskforce is to set out an implementation roadmap for the industry, to help bring together the various elements of the fast evolving digital landscape. The ultimate aim of the roadmap will be to expedite adoption and scale digitalisation of trade.
The emergence of new tools and innovations
To enable digitalisation of trade, updating core technologies for better connectivity is a priority, and Barclays has made significant progress with this process. The new age technology is making a significant difference with the ability to connect with different systems and emerging tools, which will enable us to further support digitalisation of trade. Similarly, UK businesses and companies globally will benefit from investing in their technology platforms and making them connectable to the outside world.
One of the challenges the taskforce is looking to address, is the continued digital islands in the trade space. Standardisation of legal frameworks, data formats and APIs will help achieve the legal and technical interoperability that has so far impeded the pace of progress. The taskforce will be making recommendations in this regard to the Government as part of the implementation roadmap.
Accelerating efforts towards trade digitalisation will enable the banking industry to reduce costs and processing times involved with traditional trade, therefore time to money for our clients and their supply chains. Barclays clients are already experiencing and will continue to experience a higher level of digital interaction with Barclays and a similar trend is being experienced across other banks as well.
