Digitising tens of millions of paper-based import and export documents would boost small British businesses’ overseas trade by £25bn over the next four years, according to new research.
A report by the International Chamber of Commerce – seen by City AM – has concluded that moving to a fully digital process for completing trade documentation could cut down the time it takes to complete an international transaction by as much as three-quarters.
16th century practices
Banks participating in the survey, including Lloyds and Barclays, said that scrapping “16th century bureaucracy” could increase access to global trade by 15%.
According to the report, there are four billion documents in circulation in the international trade finance system at any one time, with an average of 20 to 30 documents per transaction.
Slashing red tape could also provide more than £220bn in efficiency savings and reduce the carbon footprint of global trade activities.
Highlighting the report, the ICC’s UK secretary general Chris Southworth said on LinkedIn: “Digitising bills of lading, bills of exchange, warehouse receipts and other documents of title will deliver £250 billion in growth and efficiency savings to the UK economy. £25 billion for SMEs. An extra £1 billion in trade finance”.
Trade Finance Global (TFG) has given 12 examples of companies that are already digitising trade documentation through techniques such as blockchain and wet signatures.
These include CargoDOCS, CargoX, Bolero and TradeWindow.
Deepesh Patel, editorial director at TFG, told the IOE&IT Daily Bulletin last year that legal guidance on the standing of digital documentation has confirmed that banks do not require wet signatures.
“The move towards fully digital transactions and document processing as well as DLT (distributed ledger technology) and non-DLT based platforms has never been more important,” he said.
Ripe for disruption
International trade in general is ripe for disruption, according to one firm backed by Amazon to cash in on the move towards digitalisation.
Beacon CEO Fraser Robinson said it was looking to disrupt the trillion-dollar freight forwarding industry using artificial intelligence, search optimisation, data science, cloud and automation technologies.
“The traditional freight forwarder model remains surprisingly analogue, using systems and processes that are slow and inefficient, with opaque pricing and limited use of technology,” he told CNBC.