Lloyds Bank develops new digital trading solution for businesses

By Gloria Methri

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 that 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 digitising trade. The announcement closely follows its completion of the first digital trade transaction under the UK’s new Electronic Trade Documents Act (ETDA) last month. The bank also recently 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 by 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 is estimated 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 are 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.”