At the biggest trade finance industry event in the world, excitement about the impact of blockchain was palpable, but it also came peppered with a welcome dose of realism.

Blockchain will not be a serious play for trade finance until the underlying trade has been digitised, was the message from a procession of experts at the GTR Asia Trade & Treasury Week in Singapore this week.

“If you’re not on digital trade, it will be difficult to jump straight to blockchain,” said Huny Garg, head of trade and supply chain at Swift.

It was a sentiment shared by Thomas Olsen, who heads the strategy and corporate finance team at the Singapore office of consultancy group Bain & Co. “Distributed ledger technology [DLT] is not the primary solution. It sits on the fundamental problem of trade digitisation,” he told delegates.

Seamus Donaghue, director at Lykke Corporation, a Swiss fintech company, added that you need to digitise the process, before you start looking at the financing angle.

The past year has seen countless proof of concepts in the area of blockchain for trade finance, with banks testing the technology’s suitability amid hopes that it can make transactions more efficient and secure.

With this has come incredible hype. Many have pointed to the Gartner Hype Cycle for Emerging Technologies, which shows the phases fintech innovations pass through before mainstream adoption. Some have suggested we’ve moved beyond the “peak of inflated expectations”, but this seems like wishful thinking: GTR’s inboxes are overflowing with press releases and offers of thought leadership on a development that has yet to even be commercialised.

Many industry veterans are wondering whether the hype is warranted, with others comparing blockchain fever to the echo chamber that surrounded the bank payments obligation (BPO) a few years ago. That initiative, also aimed at digitising trade finance, seems like a distant memory, as banks flock towards its shiny successor. It died a death after failing to gain traction with corporations. Those pushing blockchain must be careful not to fall into the same trap.

The scepticism is warranted and the point over the underlying trade seems well-placed: what is the point in having a digital financial solution to a process that is still labour and paper-intensive?

The trade and logistics industries are making their own move towards digitisation and blockchain adoption, meanwhile, and the likelihood is that these will have to be progressed more before banking follows.

Bernard Wee, executive director for financial markets development, fintech and innovation at the Monetary Authority of Singapore (MAS) spoke of the city state’s efforts to digitise the trade cycle, which involve players from across the physical and financial supply chain.

“We want to connect business and government to lead trade finance out of the stone age,” he said, pointing to the fact that the letter of credit has scarcely changed in decades, and that this is how 40% of Singapore’s trade business is done. The various pilots have shown that the technology works, he said, and all elements of the trade cycle need to work together to advance it.

“We need to co-operate with those we would never have done before,” Wee said.

Banks, meanwhile, reiterated the need for further progress on the digital agenda, be it through blockchain or other methods.

Natalie Blyth, the global head of global trade and receivables finance at HSBC, meanwhile, told the audience that banks have a responsibility in times of great uncertainty to make trade easier, in order to bring “peace, prosperity and optimism to society”. Fintech and trade digitisation, she said are ways of doing this.

“The world has become a more uncertain place. There are things we can control and things we can’t control,” she said, adding: “Asia is leading from the front on free and fair trade. Last year [at the event] I said digitisation would change the industry. Now, the industry is close to live transactions on DLT.”

Kai Fehr, the head of trade for Asia Pacific at Wells Fargo, meanwhile, pointed out that trade finance lags behind most other areas of banking – and indeed of society – and urged the industry to move swiftly into the digital age.