According to a September 2025
report by the Organisation for Economic Co-operation and Development (OECD), global trade continues to depend heavily on paper-based documents, despite the rapid pace of digitalisation in other sectors.
In the report, the OECD sought to quantify the benefits of reform and identified the various policy gaps hindering the digital transition of trade processes. It notes that a mere “10% improvement in bilateral performance in automating border procedures,
combined with streamlined documentation and stronger co-operation among border agencies, could boost global goods exports by up to 18%.”
So, what is trade digitalisation? How can it be actioned? In this instalment of Finextra’s Explainer series, we explore the key aspects and benefits of digitalised trade, as well as some real-world case studies.
Characterising trade digitalisation
The digitalisation of trade is the concerted movement away from paper-based systems and processes toward electronic ones, with the aim of making international transacting faster, cheaper, and more efficient.
Several elements characterise and enable trade digitalisation, namely:
- Digital document exchange
Swapping paper documents for electronic versions is the first, foundational step to digitalising trade.
In the shipping sector, for instance, international shipments are completed through the exchange of numerous documents between multiple parties. According to the Digital Container Shipping Association (DCSA), these documents are currently not standardised
– and “the majority are still paper based, requiring physical hand-off between participants. This manual handover of paper documents is inefficient, expensive and error prone, which contributes to high costs and supply chain bottlenecks.”
The DCSA has estimated that paper Bills of Lading (B/Ls) cost the industry
$11 billion every year. Despite this, at the end of 2021, only 1.2% of B/Ls were electronic. The DCSA is working to promote the use of standardised electronic B/Ls in the shipping industry, which it says will save costs and reduce fraud.
The UK, for its part, has made strides in this area in recent years. In February 2024, Lloyds became the
first UK bank to join the WaveBL electronic trade documentation platform – enabling clients to transfer blockchain-based B/Ls across a network of members in 136 countries. This move came just a few months after the release of an International Chamber of
Commerce (ICC) UK and Centre for Digital Trade and Innovation
report, which for the first time set out the tangible benefits of the Electronic Trade Documents Act, and the opportunities it offers international trading companies.
- The use of modern technologies
Transacting parties can also leverage technologies like artificial intelligence (AI),
blockchain, and
cloud computing to upscale data management, improve supply chain visibility, and automate processes.
AI-enhanced optical character recognition (OCR), for example, can rapidly scan documents to extract and sort key information, while cloud computing enables real-time data accesses, increases solution scalability, and can even support collaboration and risk
management.
Blockchain technology, for its part, has been
touted by the United Nation (UN)’s Conference on Trade and Development (UNCTAD) as having “immense potential to make trade cheaper, more secure and more efficient,” though UNCTAD acknowledges that “more policy and technical support is needed to help countries
harness the technology.”
- Streamlined customs and border processes
Other digital tools can be leveraged by traders to help them centralise key data into a single online portal. This may include pre-arrival processing or the digital payment of duties and fees.
Developments like this are increasingly important for entities transacting across jurisdictions that lack formal or transparent trade agreements. For instance, ever since the UK left the European Union in 2020, certain sectors – especially high-value financial
services – have struggled with new residency requirements and licencing issues. By centralising all the requisite information into one portal, trade processes can run more smoothly.
However trade is digitalised, the aim is to reduce transaction costs, improve supply chain resilience, drive innovation, and, ultimately, support national priorities like economic growth. This is why
international efforts at the World Trade Organisation (WTO), regional trade agreements, and digital economy partnerships are being enacted to move to widespread adoption.
To this end, the Global Legal Entity Identifier Foundation (GLEIF),
collaborated with IOTA – a distributed ledger infrastructure – in September 2025, to explore how standardised organisational digital identity can enable instant, verifiable, on-chain trust for businesses across global supply chains. The collaboration focuses
on enabling the digitalisation of trusted global trade by increasing interoperability and inclusion.
From ambition to action
In 2024 the London School of Economics (LSE)’s Trade Policy Hub published a
report highlighting the potential economic benefits of digital trading systems to the UK economy. The research set out the importance of the services trade to the UK economy; the relationship between exporting services, productivity, employment, and output;
and proved that a 1.3% rise in UK gross domestic product (GDP) would proceed the universal adoption of digital trading systems.
With the economic benefits of trade digitalisation established, analysts are asking what it will take for transacting parties, governments, and regulatory bodies to make the leap and enact decisive change. Afterall, leaders in the industry
lament the sluggish pace of change and the seemingly monumental task ahead.
Shifting the dial
What may finally shift the dial is what Dr. Tobias Miarka, head of corporate banking, Crisil Coalition Greenwich, has
labelled today’s “poly-crisis.” In an era of seemingly continuous economic and geopolitical crises, a premium is being placed on efficiency, flexibility, and risk mitigation. That dynamic may, ultimately, change the return-on-investment calculation for
global corporates in trade finance and supply chain management – driving organisations to invest in modern trade finance and supply chain management capabilities.
This new focus, Miarka argues, could “accelerate digitisation and open the door to next-gen solutions with the potential to make core corporate functions more transparent, flexible and efficient.”