The Barclays-ICC United Kingdom digitalisation of trade task force, established a year ago, brings together stakeholders from across the trade ecosystem to counsel the UK government on advancing digital trade. In this roundtable discussion, the two task force leaders meet with corporate executives to assess progress, tackle challenges and underline the pivotal role of corporate engagement in shaping the course of digitalisation.
Roundtable participants
- Ian Powell, customer and technical solutions director, Metro Shipping
- Shobhit Singh, head of trade finance – metal concentrates, Trafigura
- Chris Southworth, secretary general, ICC United Kingdom
- Jaya Vohra, global head of trade & working capital product and client management, Barclays
- Shannon Manders, editorial director, GTR (moderator)
GTR: What standout successes have been achieved – globally or within the UK specifically – in terms of digital trade over the past year?
Southworth: We’re at a really important inflexion point in trade, marked by the enactment of the Electronic Trade Documents Act (ETDA) last September. This legislation has removed the final hurdles to digitalising trade across borders in both private sector operations and international trade corridors, with free trade agreements playing a key role in shaping the supportive legal environment. The UK has been instrumental in spearheading global efforts to dismantle legal barriers, particularly in the transactional space.
We’ve talked for a long time about the need to connect systems and allow information to flow across global supply chains, and the work on interoperable standards is now starting to come into place. The International Chamber of Commerce Digital Standards Initiative (DSI) recently released its Key trade documents and data elements (KTDDE) report, which sets out a complete framework for end-to-end supply chain digitalisation of all 36 key trade documents. This is a really important foundation to enable us to go fully digital.
Another important piece concerns identity frameworks, which are vital to linking everything in the trade system. The ICC United Kingdom, along with various partners, recently published a report entitled Scaling the use of digital identities in trade, which spotlights this issue and highlights why the existing infrastructure is not fit for purpose.
So, the good news is that the infrastructure is beginning to take shape. At a global level, it’s clear that much of the progress will unfold over the next three years. In the context of the UK, that aligns with the timeframe for the single trade window. We’re one of the only countries at the moment that can build all of this interoperability across the systems into a single trade window from the outset, which is a huge opportunity. If we get it right, I’m confident we’ll be having a very different conversation three years from now.
The challenge lies in education and awareness. Not enough companies are aware of the benefits of digitalisation. Some companies have recently begun adopting new digital tools and scaling them across their systems. While this engagement is promising, it needs to be scaled up to maximise benefits.
There’s also a pressing need for more holistic systems thinking. There are too many siloed conversations on various aspects, such as identity frameworks, fraud, KYC checks and borders. Trade operates as an interconnected ecosystem, and there’s a real need for coordination between the multiple actors.
Singh: We have been discussing many of these initiatives over the last couple of years. The ETDA’s arrival is an important milestone for companies like Trafigura because the majority of our contracts are governed by English law. Enabling that legal enforceability really paves the way for us to do more digital transactions going forward.
We started working on digital negotiable instruments and electronic bills of lading (eBLs) in the last few years to lay the groundwork in anticipation of the ETDA being enacted. We looked at our portfolio and identified which transactions we wanted to target for these documents or instruments to be included. Now, with the ETDA in place, we’re advocating for banks to recognise an eBL as a valid collateral document. Today, if we were to conduct transactions using eBLs, many banks might view them as unsecured collateral – and there’s obviously a notable difference in financing costs between secured and unsecured options. Collaboration with regulators, which the ICC is very involved with, will be crucial in this next phase.
We’ve made good progress by implementing eBLs and digital negotiable instruments in many of our transactions, including making use of export letters of credit (LCs) governed by eUCP. This has notably reduced overall transaction times. In complex voyages like those from Latin America to Asia, which traditionally take up to 30 days for documents to be couriered and processed, digital solutions have more than halved the timeline. Working with various banks, we’ve been able to successfully expedite transactions, and we’re eager to expand this adoption further.
We’ve also successfully digitalised a number of trade routes beyond the Latin America to Asia corridor. Testing routes from Africa to Asia, Americas to Europe, and so on, has yielded positive results. However, the challenge now lies in overcoming market inertia and encouraging broader adoption.
Powell: Looking at it on a more granular level, while the progress with the ETDA is conceptually very good and promising, translating that high-level concept into practical adoption presents challenges.
While overarching mechanisms are important for setting the agenda, the real effort lies in navigating the complexities at the operational level. As a freight forwarder, getting into the real details and granularity is where it gets challenging.
GTR: In your experience, what factors have played a crucial role in successfully driving the adoption of digital trade solutions within organisations or industries? What’s holding us back?
Vohra: When considering the technology aspects, it’s obvious that in order to trade digitally we need new tools, but we also need organisations to be able to connect with these emerging technologies. Unless we have that, we will still have elements of paper somewhere along the chain. At Barclays, we are very mindful of this and have upgraded our core technology platform to be more connectable with new technologies enabling digitalisation.
In terms of what we’ve seen land so far, we have all the building blocks in place from a technology legal framework and standards perspective. I think the ICC has done a great job with the KTDDE report, and now we need to see the standards evolve to the actual data formats. This is critical to ensuring consistency, or else parties across the world will develop their own digital documents and data standards, resulting in a continued lack of interoperability. Also, while we have made good progress on the legal frameworks, it’s evident that further adoption is necessary, particularly across key trading corridors worldwide.
In addition to interoperable legal frameworks, interoperable standards and interoperable technology, we need to think about actions that will enable adoption at scale. At this point, widespread adoption across the ecosystem is being held back by a lack of awareness. It’s crucial for both small and large companies to understand key developments and access available resources so that they can arm themselves with the necessary information to build a commercial case and implementation plan for digitalisation.
What we’re seeing today is a lot of good transactions, but they’re conducted in siloes across individual platforms. To move to the network effect, as an industry, we need to articulate the commercial case for organisations to adopt this journey, both in the short and long term. Achieving operational efficiency, reducing the working capital gap and reducing costs are some of the immediate benefits. However, digitalisation will also help organisations achieve their sustainability goals through the reduction of paper used across the trade ecosystem.
Commercial incentives form a key part of this industry action to build scale and it is an important area the task force is actively exploring. With support from the government and key industry players, the task force will help deliver a unified voice and action, from industry and government, towards achieving the network effect of digitalisation.
GTR: From a corporate perspective, what are some of the other primary opportunities in scaling digitalisation within trade and trade finance?
Singh: The reduction in the number of days is significant and impacts our ability to optimise our credit lines with banks rather than tie up those lines for, say, 30 days.
Moreover, it translates to lower costs, both the funding costs as well as the commercial costs, given there are fewer delays.
We’ve been advocating for banks to adopt more flexibility across their operations – and I’ve already mentioned eBLs. We urge banks to handle physical documents close to the discharge location. For instance, if the sale is to China, we encourage handling in Singapore or Shanghai, which inevitably increases costs for the banks. However, once transactions are conducted on a platform with eBLs, DNI instruments and export LCs under eUCP, banks can reduce their physical presence worldwide, streamlining their operations.
Powell: I think it’s important to keep in mind all of the different actors within the supply chain that are involved in the movement of goods, and the fact that they’re sometimes quite fragmented in terms of their individual approaches.
So, for example, with bills of lading, if you just have one party in the whole chain that cannot accept an electronic version, it undermines the value and advantages of being able to use them, forcing a fallback to traditional paperwork. The key is to align all these disparate actors and encourage them to move collectively in the same direction to really achieve the network effect.
Shobhit has outlined some of the opportunities associated with going digital, such as speed and operational efficiency. There are also a number of opportunities linked to data, such as data integrity and quality, error reduction and fraud prevention. The commercial component is also very important. I think the next step is that we need to quantify these benefits and communicate their value to all actors in the supply chain. It’s still early days for this, but these advantages are definitely worthwhile.
One of the greatest challenges in all of this is connectivity. Many organisations still rely on legacy systems and manual processes, including extensive use of Excel spreadsheets, for example. The industry needs to address this.
Southworth: As an industry, we need a lot more innovative thinking. I don’t think anyone would argue with having a transaction reduced from three months to three days, but the question is, how do we do that? The challenge lies in finding innovative solutions rather than sticking to current practices. We need to envision what could be possible tomorrow and work towards that. Collaboration is key; one company alone can’t achieve this. Engaging with governments and customers is crucial to ensure everyone is aligned and working together towards the same goal.
This is essentially a change management programme. While we may be discussing trade digitalisation, it’s about fundamentally improving how we trade, and it needs to start with the basics. The message to companies is simple: just get going, keep it simple, and familiarise yourself with the solutions available. We need early adopters and trailblazers to lead the way. It’s not about revolutionising everything overnight; it’s about showcasing possibilities gradually. Organisations like the International Chamber of Commerce, along with governments, play a vital role in educating the market about what’s achievable. The good news is that – without exception – every case study demonstrates significant benefits.
I also think we need to clearly articulate the different business cases to the various actors in the system. For corporate treasurers, for example, it’s not about trade digitalisation; it’s about cash control and management and unlocking the US$500bn of cash trapped in the system. This is a very different argument from a global supply team, which wants efficiency and simplified processes for end-to-end transactions.
We shouldn’t forget that the drive to digitalisation aims to create sustainable supply chains, which we cannot deliver while we’re still on paper. Over the next few years, we need to get ourselves fit for purpose so that we have the data availability and transparency to make informed decisions on what is sustainable and how we address those much bigger challenges of climate change and biodiversity loss. Going digital is the necessary first step.
GTR: Conversations about the digitalisation of trade finance have often excluded direct input from corporates. Why is it essential to involve corporates in these discussions and decision-making processes?
Vohra: It’s critical to place corporates at the forefront of digitalisation discussions and efforts. Trade hinges on agreements between buyers and sellers, who agree the contractual terms, including the required documentation. While banks play a key role in processing these documents according to industry standards, they can’t influence this space alone.
It’s incredibly important that we ensure that corporates are aware of the benefits of digital trade. Big global corporates will probably be ahead of the curve. But if we talk about small and mid-sized companies, we need to be there to help support them on the digitalisation journey too.
I think banks agree that collaboration is crucial, which is why we’re all represented in the task force. It’s not just Barclays, the ICC, or the Department for Business and Trade; we have solid support from across the banking and corporate sectors. As Chris has noted, this is effectively a change management programme. We’ve outlined the strategy and have set the levers; now we need to focus on the implementation. We’re at a stage where we must clarify the ‘how’, while also refining the ‘why’. What’s the business case for participation? How can we streamline our efforts to avoid duplication?
Southworth: Jaya’s point is spot on. The true drivers of the trading system are the buyers and sellers. Yet, I think they often underestimate their influence or feel powerless when acting alone, regardless of their company’s size. However, when united as a corporate community, their collective strength can shape both economic growth and sustainability goals. Once aligned, other stakeholders, including government, can support their efforts. Our task now is to rally this corporate power, as it holds the key to driving meaningful change. It’s crucial for the next phase of our journey.
Singh: Corporates should be in the driving seat with these discussions.
As Jaya rightly pointed out, without our supply chain transactions, there would be no need for financing. Therefore, corporates, whether large entities like us or SMEs, need to assert their demands more strongly. Personally, I’ve been quite assertive with our banks over the past years, emphasising the importance of prioritising digitalisation. It’s not merely about recognising the advantages, it’s about taking ownership and pushing for change. Over the past couple of years, we’ve been pushing on multiple fronts – with banks, suppliers, receivers and shipowners. It’s a time-consuming and energy-intensive process, as not everyone is prepared to or capable of driving negotiations like Trafigura.
I wouldn’t say that banks are resistant to digitalisation. In fact, they’re quite receptive to it. The challenge lies in a dilemma I often encounter in conversations with them when they ask about the critical mass on a platform that I may be using and question whether there are enough participants for them to engage with it. This situation resembles a chicken-and-egg scenario; how can a platform attract critical mass without the right players getting involved, and vice versa?
For me, the focus shouldn’t be on a specific platform but rather on the path forward and the execution of transactions, regardless of the platform. It needs to be a technology and systems-agnostic approach. Banks, however, express concern about investing time and resources into a platform only to witness a shift in critical mass later on. It’s a complex issue with no easy solution; there’s no definitive answer about which platform to adopt or which will be the most successful, and I believe this shouldn’t be the primary focus of our discussions. I also think that there needs to be more collaborative efforts between the platforms themselves.
GTR: What notable achievements or milestones has the Barclays-ICC UK task force reached thus far? Where are the focus areas for future efforts?
Vohra: To recap, the task force, comprising Barclays, ICC UK and the Department for Business and Trade, was formed to put forward a set of recommendations to the government on four main areas: Basel 3.1’s impact on trade, digitalisation, fraud risk, and enhancing KYC and AML efficiencies. We’ve made notable strides in advancing the discussion. Already, we’ve submitted recommendations on Basel 3.1 to the government for further engagement with regulators, and now await the outcome of that.
While digitalisation, fraud prevention and KYC and AML are all interconnected topics, the primary focus of the task force is on the digital strand.
Our achievement lies in fostering a unified voice among stakeholders within the working group, including banks, industry associations, consultants and corporate representatives.
We’ve identified a pressing need for an implementation roadmap to address the challenges we’ve been discussing today. One of those challenges is the hesitancy to be a first mover due to potential investment risks and uncertainty regarding navigating the digital landscape and accessing the necessary resources.
The roadmap will outline short, medium and long-term measures for industry alignment. In the short term, actionable steps can be taken today, such as leveraging resources provided by organisations like the ICC. In the medium to long term, the objective shifts towards scaling digitalisation efforts to achieve the desired network effect.
It’s all about building a commercial case for the early adopters and paving the way for widespread digitalisation. But it’s also about seeking support for a long-term plan from government and key players to help build the commercial case and implementation plan, especially from an incentivisation and technology perspective.
Southworth: Compared to various other forums on trade digitalisation, this task force has really broken new ground because of the government’s involvement. On a global scale, it’s truly unique. The diversity of the group has allowed us to build a common understanding among stakeholders. Through extensive dialogue, we’ve begun addressing longstanding challenges and are now progressing towards solutions, as Jaya has outlined.
Addressing issues like fraud, KYC and broader digitalisation reveals common themes such as standards, data sharing and government cooperation. By aligning these components, we can enhance the entire system. The discussions we’re having mark a significant step forward in tackling these issues comprehensively.
The roadmap that Jaya has mentioned is crucial in terms of implementation, and here in the UK, we’re figuring out the path for the rest of the world.
When you see what is happening over the next three years in terms of new trading corridors and practices and borders going digital, it makes sense why we’re now really trying to get companies to double down on digitalisation. We’re aiming to highlight these changes and offer clarity on the incentives.
In the medium to long term, this will help unlock more investment into technology solutions, while in the short term, it’ll give companies the confidence to take that initial leap on their digital journey.
Powell: That’s quite reassuring, Chris, to have that roadmap outlined. At a strategic level, it’s important to convey that global trade involves numerous individual actors – and each party contributes differently. Having a clear framework and roadmap for what each party can deliver to generate cumulative value is beneficial.
GTR: Looking ahead, what one word or phrase would you use to describe the trend or activities you anticipate will shape the future of digitalisation in international trade?
Vohra: I would say consolidation of standards, technologies and the various divergent approaches is key.
Southworth: Corridors will have a significant impact. For instance, the UK-UAE-Singapore corridor is fully digitalised, setting a precedent for others. Government involvement in these discussions will play a crucial role in shaping future developments.
Powell: I think it’s about clarity and taking clear, incremental steps – and articulating these steps to different stakeholders. We need to break down the broader goals into actionable items.
Singh: I believe it’s crucial to have the drive and the desire to scale your digital trade operations.
The information herein is not, and under no circumstances should be construed as, an offer or sale of any product or services and it is provided for information purposes only. This is not research nor a product of Barclays Research department. This information is not directed to, nor intended for distribution or use by, any person or entity in any jurisdiction or country where the publication or availability of its content or such distribution or use would be contrary to local law or regulation. Barclays PLC and its affiliates are not responsible for the use or distribution of this information by third parties. Where any of this information has been obtained from third party sources, we believe those sources to be reliable but we do not guarantee the information’s accuracy and you should note that it may be incomplete or condensed. The information herein does not constitute advice nor a recommendation and should not be relied upon as such. Barclays does not accept any liability for any direct or consequential loss arising from any use of the information hereto. For information on Barclays PLC and its affiliates, including important disclosures, visit www.barclays.com
