Estimated reading time: 5 minutes
Global trade often relies on processes and systems that have been in place for a number of years.
For many companies, these ways of working are important to how businesses operate and it is therefore difficult to imagine doing something different. This is problematic because, on the surface, there are many very good reasons to consider digitising trade entirely.
It is certainly the case that there is a significant range of benefits when it comes to the idea of digitising global trade. There are opportunities everywhere from increasing efficiency and productivity, through to the environmental advantages of moving away from paper-based systems to digital processes.
So, it might seem that digitising trade is something that should happen as a matter of course. However, this is overlooking the fact that there are challenges that need to be overcome if any kind of digital rollout can be successful.
One of the great challenges for digitising global trade actually comes from the potential new avenue of crime that businesses could find themselves facing. Cybercriminals are increasingly sophisticated and well-funded, and they are always looking for ways to target organisations effectively.
This means that if there is a focus on digitising global trade, there needs to be a secondary focus on putting in the right cybersecurity measures. So far, so easy – but there is a further challenge here in that we have already established that are so many different processes, entities, and touchpoints involved in global trade.
Talk to any cybersecurity specialist and they will talk about three key issues: cybersecurity systems need to be intelligent, autonomous, and integrated. And it is the third of these that could be the biggest problem – trying to get cybersecurity security solutions that are integrated across a trade network is extremely challenging.
It is clear that any effort to focus on the benefits of digitising global trade needs to acknowledge and find a solution to the problems that cybercrime can present. Ultimately, bringing all of the relevant entities together to a single platform may not be possible – instead, we may be reliant on cybersecurity technologies that can work together seamlessly.
The cost implications
It must also be addressed that making these types of changes naturally comes with expenses and cost implications for businesses. Whether a company is putting a budget into creating its own digital solution, or they need to invest in software and systems designed elsewhere, the whole thing is expensive.
But effective digitising of trade does not mean a single business investing, it means companies across the industry doing so. While some businesses will easily have the funds available, others will struggle. This will further elongate the process of switching over to digital systems.
Part of the challenge here is understanding that just because something is a good idea for a company in principle, it does not mean that they want to do it. Indeed, a huge number of entities involved in global trade are perfectly happening working using paper systems and feel most comfortable doing that.
They may recognise the benefits of changing to a digital system, but they might think that those benefits are not enough to in comparison to the upheaval and potential teething problems that moving to a digital system could create. Indeed, many might be very happy with the idea of working with legacy paper systems.
There will need to be a concerted effort to convince entities of the benefits of any change in the system.
A big part of this challenge is convincing all of the relevant parties that this is the right move to benefit them. In doing so, it will be necessary to overcome a further challenge. With any kind of large-scale change to a different system, there are inevitably going to be bumps in the road and teething problems. There is the potential that these kinds of issues could derail the whole process of change.
When these problems do arise there will naturally be dissenting voices asking whether all of this is really necessary after all. It will be important during this period to have support in place to make it as easy as possible for organisations.
One of the true challenges of digitisation is a lack of standardisation, both in terms of how trade is regulated and in the ability of technologies to work together seamlessly. With paper systems it can be very easy to ensure that everyone works with the same parameters – documents are simple to standardise.
With technology especially, this is not the case and there are multiple issues to highlight. For example, many organisations have already made headway into creating their own digital solutions. However, these solutions may not be able to interact effectively with other organisations’ systems.
It is also true that as these systems need to work across multiple jurisdictions, the technology is subject to the challenge of overcoming bureaucracy.
Ultimately, the benefits of digitising makes perfect sense for the industry and it organisations would see a wide range of advantages. But it is essential for businesses to be mindful of the challenges they face. Doing so will make it easier to find solutions to these problems, but will also allow organisations to understand the scale of the issues they face.