<Role of FinTech platforms in the trade finance industry> by Swati Babel, Triterras’ VP of Business Development. Click to read article.

UK’s proposed law to digitize documents in trade finance transactions will benefit SME traders


The Electronic Trade Documents Bill being proposed in the UK is a significant development for the international trade finance industry. If passed, the draft bill will allow for digital possession of documents and proposes a secure and efficient framework for paperless trade finance transactions. The bill is set to be discussed during the UK government’s next parliamentary session.

Though this bill extends to England and Wales only, it is relevant globally because English law is the preferred governing law internationally for business transactions, especially in sectors such as international commercial contracts, banking and financing, maritime and shipping.

Triterras spoke to Treasury Today Group about the proposed bill for its recent article, UK takes lead on digital trade. Ram Arapally, Executive Vice President of Triterras, says: “If the Electronic Trade Documents Bill becomes law it will have a major impact on the commodity trading space by bringing more speed to the trade.” Arapally added: “To allow a digital document to take on the same legal status as physical paperwork increases security and when hashed in a blockchain can be a better source of originality.”

Research from OECD indicates that small and medium sized businesses benefit from streamlining and the automation of trade documents and cross-border processes more than their larger counterparts. The lack of digital records continues to limit access to formal finance for SMES, restricting their ability to grow.

Electronic trade documents will make verification processes more reliable and efficient with monitoring and tracking of documents pre-trade, in transit and in post-trade, demanding fewer manual hours and lower turnaround times for multiple document checking processes.

Distributed Ledger Technologies such as blockchain can play an important role in digitizing traditional documentary credit as well as supply chain finance. Triterras’ Kratos is an AWS managed Hyperledger -based blockchain enabled platform that enables SME traders to get easier access to financing and improves process efficiencies across the supply chain—reducing costs, ensuring against fraud and mitigating risk.

The International Chamber of Commerce estimates that digitizing trade documents could generate $28.41 billion in new economic growth by 2024 and free up $282 billion in efficiency savings.

Top Articles to Read Next

African Development Bank approves $75mil facility for FirstRand Bank to enhance trade financing on the African continent

The approved facility will enhance FRB’s ability to underwrite trade finance transactions originating from issuing banks in several countries, including transition states and low-income countries across Africa. It is estimated that when fully utilized, this RPA facility, will support approximately $500-600 million of trade over the next 3 years, of which more than $100 million will support intra-African trade and exports.

Role of FinTech platforms in the trade finance industry

The role of FinTech platforms in the trade finance industry is to provide an efficient and cost-effective way for businesses to finance their international trade transactions. The platforms offer several advantages over traditional banking products, including access to capital, flexibility and cost effectiveness, as well as agility and efficiency.

Paperless trade for UK businesses to boost growth

The Electronic Trade Documents Bill introduced in Parliament earlier in October 2022 last year, aims to boost the UK’s international trade, already worth more than £1.4 trillion, and will reduce the estimated 28.5 billion paper trade documents printed and flown around the world daily.

We use cookies to improve your browsing experience and to analyse the use of our website. By using this website, you agree to the use of our cookies in accordance with our Cookies Policy and Privacy Notice.