Lloyds Bank and Enigio have formed a new long-term partnership to increase the use of digital documentation in trade finance through blockchain technology.
With this partnership, Lloyds Bank and Enigio will look to widen the application of Enigio’s trace:original solution for digital original documents, including promissory notes, bills of exchange and bills of lading. It will also explore opportunities to feature trace:original documents within wider trade finance products, such as documentary collections and credits.
By removing the need to physically transfer documentation within trade transactions, Lloyds Bank aims to deliver faster, more affordable, flexible, sustainable and secure digital trade solutions for clients.
Enigio’s trace:original solution enables the creation of digital documents that can be ‘possessed’ by an individual, transferred between parties, and originals can be distinguished from copies, just like paper-based counterparts.
This means digital documents can be used in processes where an ‘original’ document is required. Unlike other digital trade solutions that require all parties to subscribe to digital platforms, Enigio’s solution only requires the party creating the document to be an Enigio user.
Lloyds Bank’s work with Enigio is part of its ongoing digital strategy and paperless trade initiative and follows its successful completion in August 2022 of the UK’s first transaction utilising a digital promissory note purchase.
This pilot transaction, which was also the first under the International Trade and Forfaiting Association’s (ITFA) Digital Negotiable Instrument Initiative (DNI), saw the sale and purchase of land worth £48 million completed between several UK businesses within a single day. The underlying promissory note was issued using trace:original.
In February 2023, Lloyds Bank also shared its learnings and experience in electronic payment undertakings (ePUs) under the DNI initiative to help fintech group Mercore complete the UK’s first digital bill of exchange transaction, which was also executed through trace:original.
Gwynne Master, managing director, lending and working capital, Lloyds Bank, said, “We are excited to have taken another major step on our quest to digitise trade. This partnership further cements our relationship with Enigio as we continue to widen the types of documents and underlying flows that will utilise ‘trace:original’ documents.
Existing industry-wide trade solutions are, comparably, much slower, more cumbersome and more environmentally intensive than their digital counterparts, involving upwards of 28 billion pieces of paper, globally every year. Digitisation makes processes faster, cheaper and more secure. We support the adoption of digital trade documents and look forward to collaborating widely with our clients and partner banks to support their continued uptake.”
Patrik Zekkar, CEO of Enigio, said, “We are pleased to enter into a long-term partnership with Lloyds Bank, as it has been instrumental in the journey of enhancing trace:original to meet current and future demands for digitisation of trade documents and the trade value chain.
Jointly taking an industry perspective in the continuing improvements of trace:original, as well as Lloyds Bank’s open, collaborative approach, inviting and sharing experiences, shows a broader commitment to drive the digitalisation agenda in trade. We look very much forward to continue this advantageous journey with Lloyds Bank and the trade community overall with the greater purpose.”