The inefficiency around paper documents in Documentary credit is well known and Banks are in different stages to implement change based on their processes and technological maturity to mitigate those. Some changes have FinTech partners as they touch the pain points through Trade portals, Discrepancy check automation and electronic documents platforms to name a few. In the post 'Electronic Trade' documents world will the ‘discrepancy check automation’ processes be anymore valid - scanning paper documents, uploading in trade portal, OCR extractions and pulling out discrepancies? Banks can use electronic trade platforms which use contractual turnarounds to understand the challenges in the To Be state and mitigate them accordingly thus firming up their change priorities & prevent cash burns. The To Be state is backed by both extensive and intensive work of the Law Commission (Reforming the Law) - Electronic trade documents, UK reform report. With almost no rework to changes in law or systems a block of 56 Commonwealth Nations awaits in the wings post UK laws.
The Law Commission has not only drawn the list of documents to be made available in electronic form  but also issues/actions around each of those ( Integrity , Indorsement , Control of a Document ,Set of documents ,Retention of documents, Endorsement, Transfer of ownership and possession ) with deep consultations across bankers , academia , market players like Cargo & Insurance companies, legal experts and most importantly electronic trade document providers of the day - Bolero and EssDoc . To quote Bolero International Ltd verbatim - “[i]n the context of facilitation these documents are most commonly used”. Most of these issues/action linked to those documents recommended for electronic for being already a part of existing electronic Trade platforms like manage all eBL(Bill Of Lading) events such as eBL notifications, title transfer, amendment, surrender and switch to paper.
On the path to consensus there has been dissenting view as well. To have an example - In case of integrity of documents MLETR contains an express requirement in relation to the integrity of documents. While Bolero International Ltd said that an integrity requirement would introduce “an unnecessary complexity” Phillips 66 Ltd said that industry participants would not use electronic trade documents unless they had confidence in the underlying system.
Post the legislation Law Commision work aligns with existing electronic trade platform which made it possible for a Portugal Bank to help its client import from India using electronic documents during Covid's peak. Banks thus have a perfect environment to set its transformation priorities.
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