Lloyds Bank Develops Digital Trading Solution to Support UK Firms

Lloyds Bank has developed a new solution where clients can request digital Direct Guarantees or Standby Letters of Credit, helping them to trade more efficiently, safely, and securely.

The bank’s Paperless Guarantee initiative, “created to support businesses who have a high volume of transactions requiring bank guarantees to be issued, enables instant delivery to recipients while reducing their carbon footprint.”

This is Lloyds Bank’s latest investment in “supporting the move towards digitizing trade and closely follows its successful completion of the first digital trade transaction under the UK’s new Electronic Trade Documents Act (ETDA) when it came into force [on 20 September].”

Lloyds Bank was also the first in the UK to complete a transaction “utilizing a digital promissory note purchase [in August 2022]. It also recently announced it has invested €3 million in Enigio to help expand and accelerate the use of digital documentation in trade.”

It is estimated that trade finance “results in around 28.5 billion pieces of paper moving around the world each year.” Through its Paperless Guarantee initiative, Lloyds Bank aims to further support clients who are looking “to secure new business and meet contractual obligations, reduce time, cost and logistics, as well as cutting carbon emissions through reducing the need to courier paper.”

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.”

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