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Lloyds Bank and Mercore, the fintech, have successfully executed a series of digital trade transactions under the International Trade and Forfaiting Association’s (ITFA) Digital Negotiable Instrument (DNI) Initiative.
The transactions involved a sugar shipment from the Americas to the UK, utilising a digital bill of exchange (dBE) created on Enigio’s trace:original platform. Mercore initiated the process by creating the dBE for their exporting client. The instrument was then transferred digitally to Lloyds, who arranged for their importing client to accept it electronically.
This collaboration represents the first instance of a DNI being transferred between two separate financial institutions under the ITFA initiative. Previous digital transactions typically involved only one financial institution managing both the importing and exporting parties.
Surath Sengupta, Managing Director of Trade Innovation and Transformation at Lloyds, said, “Digital trade solutions make it simpler, faster and more efficient for our clients to do business.” These efficiency gains motivate the digitisation of trade documents to a great extent.
The ITFA’s DNI Initiative aims to fully digitise Bills of Exchange and promissory notes in cross-border trade. This latest development builds on previous milestones, including Lloyds’s completion of the UK’s first digital promissory note purchase in August 2022.
André Casterman, ITFA Board Member, noted that the transaction “demonstrates the scalability of digital negotiable instruments when implemented in a collaborative way using interoperable technologies”.
Industry observers suggest that such digital innovations could significantly reduce processing times and costs associated with traditional paper-based trade finance, potentially increasing access to trade finance for businesses worldwide. Collaboration between banks and fintechs can drive financial inclusion globally.
