Lloyds Bank has introduced a digital solution, which enables clients to obtain Direct Guarantees or Standby Letters of Credit, thereby enhancing the efficiency, safety, and security of their trading activities.
The initiative, known as the Paperless Guarantee, is designed to assist businesses that frequently require bank-issued guarantees. It offers immediate delivery to recipients and minimises their environmental impact.
This development is part of Lloyds Bank’s ongoing commitment to digitalise trade. It comes on the heels of the bank’s successful execution of the UK’s first digital trade transaction under the newly enacted Electronic Trade Documents Act (ETDA) as of 20 September.
Lloyds Bank also led the way in the UK by completing a transaction using a digital promissory note in August 2022. Additionally, the bank recently announced a €3 million investment in Enigio to expedite the adoption of digital documentation in trade.
Trade finance is responsible for the circulation of approximately 28.5 billion pieces of paper globally each year. Through its Paperless Guarantee programme, Lloyds Bank aims to further assist clients in securing new business, fulfilling contractual requirements, and reducing time, costs, and logistics.
The initiative also contributes to lowering carbon emissions by eliminating the need for paper couriers.
Gwynne Master, Head of Lending, Trade & Working Capital at Lloyds Bank said, “By working closely with our clients and their buyers and their sellers, we have a deep understanding of the nuances and challenges of trading internationally. Our latest development, the Paperless Guarantee initiative, offers clients a solution to some of those challenges. It is much more efficient, saves time, and removes costs. Removing the need for the physical delivery of paper is the future of trade and we are proud to be supporting our clients to achieve this with our new initiative.”
ABTA, the largest travel trade body for UK travel agents, tour operators and the wider travel industry, manages a high volume of guarantees (bonds) for its members.
ABTA has worked with Lloyds Bank to switch to a paperless format and is aiming to introduce this new process to other approved bond providers. When the process is complete, it estimates the change could eliminate the use of at least 3,500 pieces of paper each year.
Rachel Jordan, Director of Membership and Financial Protection at ABTA, said, “We’re always looking for new ways to deliver sustainable, efficient, and cost-effective services to our members, so we’re really excited about our new paperless arrangement with Lloyds Bank. As one of ABTA’s approved bond providers, this initiative will not only speed up the bond renewal process for ABTA members who are Lloyds Bank clients, it will also result in operational efficiencies and cost savings.”