The drive to standardise trade finance
Trade finance has long stood apart from other areas of financial services, technically sophisticated yet, in too many ways, operationally antiquated. Even now, it remains tethered to paper, to wet-ink signatures, to physical couriers moving documents between banks, ports, and counterparties. It is a space where manual intervention still governs much of the transactional flow and where the absence of electronic uniformity has been a stubborn barrier to progress.
But we are now entering a period of transformative change. What was once perceived as an intractable challenge is rapidly becoming a global imperative. This is not merely about streamlining operations. It is about re-engineering how international trade is financed, how risk is shared, and how trust is embedded within digital systems.
As someone who has worked across all areas of trade finance, and is now involved heavily in the digital evolution of trade, I view this standardisation agenda as pivotal. It touches every aspect of the trade finance ecosystem; document formats, legal frameworks, compliance processes, data integrity, and system interoperability. It is no longer a back-office ambition; it is a defining strategy for the future of trade finance itself.
Resistance
To appreciate the scale of this transformation, we must first understand why trade finance has historically resisted standardisation. At its core, trade finance is not a single system but a constellation of instruments, participants, regulators, jurisdictions and legal regimes. A single transaction can involve buyers, sellers, issuing and confirming banks, shippers, insurers, freight forwarders, and agencies, all operating across different time zones, legal traditions, and technical infrastructures.
Each deal is governed by a unique set of documents: bills of lading, commercial invoices, inspection certificates, and credit instruments that vary not only by commodity and geography but often by bilateral agreement. Add to this the reliance on manual processes and legacy systems, and it is little surprise that fragmentation has persisted.
This lack of harmonisation has carried costs. Without shared standards, automation is difficult; without automation, scale is limited; without scale, cost-to-client remains high. And where fragmentation exists, fraud, operational risk, and compliance breaches find room to flourish.
Standardisation, then, is not a refinement – it is the precondition for progress.
Convergence
It can be reasonably argued that we are now seeing a convergence of forces: regulatory, commercial, and technological, driving trade finance towards greater standardisation.
The first is regulatory pressure. Financial institutions are under intensifying scrutiny to meet a host of obligations: anti-money laundering, counter-terrorism financing, sanctions compliance, tax transparency, and ESG reporting. Manually conducting these checks across non-standard documents and varied formats is no longer viable. Regulators are demanding transparency, auditability, and uniformity, and institutions must respond.
Second is the expansion of cross-border trade. With the rise of intra-Asia trade corridors, Africa’s growing role in global supply chains, and increasing regional integration, the cost of maintaining fragmented, country-specific trade processes is becoming unsustainable. Harmonisation is now recognised as an enabler of cross-border interoperability and efficiency.
Third is the pressure of efficiency. Trade finance margins have tightened. Institutions are under cost constraints. Manual document checks, inconsistent KYC, and repeated reconciliation exercises impose overheads that can no longer be justified. Standardisation enables automation, and automation is the path to sustainability.
Finally, technology has matured. What was once speculative – blockchain, smart contracts, digital identity – is now viable at scale. APIs, cloud infrastructure, and distributed ledger platforms can communicate across ecosystems, provided the data formats and legal underpinnings are aligned. The tools exist; what is required now is collective will.
Infrastructure
Efforts to standardise trade finance are not happening in a vacuum. A range of global institutions are leading this effort, each contributing legal rules, technical frameworks, or data governance.
The International Chamber of Commerce (ICC) has long been at the core of global trade rules. UCP 600, ISBP, and URDG remain foundational to the issuance and interpretation of trade finance instruments. Through these rule-sets, the ICC has brought order, predictability, and legal certainty to the inherently complex, multi-jurisdictional world of international trade.
These rules do not carry the force of law in themselves, but they are widely adopted by contractual agreement, embedded within thousands of trade finance instruments every day. and form the basis upon which banks examine documents, determine compliance, and manage risk. Collectively, they have created a common language and procedural framework that bridges legal systems, languages, and business cultures.
UCP 600, first published in 2007 and building on earlier iterations dating back to 1933, is the most widely used set of rules governing documentary credits. It provides a consistent framework for the issuance, advising, confirmation, and settlement of documentary credits. Crucially, UCP 600 shifts the focus of documentary credit operations from the underlying sale contract to the examination of documents alone. This principle of independence, wherein banks deal in documents and not in goods, has been one of the great levelling mechanisms in international trade, enabling parties who may never meet, operating under different legal systems, to transact with confidence.
ISBP, a complementary text to the UCP, offers interpretative guidance. Where UCP provides the scaffolding, ISBP fills in the operational detail, clarifying how banks should examine documents in practice. For instance, it addresses commonly misinterpreted clauses, and provides direction on how anomalies should be assessed. Over time, ISBP has evolved into an indispensable reference for both banks and traders, helping to reduce discrepancies and mitigate the subjectivity that once plagued document checking. The ISBP is currently under revision and a new, even more pertinent version, will be released by the end of 2025.
URDG, meanwhile, governs demand guarantees, an area of trade finance that, while not as document-intensive as documentary credits, nonetheless benefits greatly from harmonisation. URDG 758, the current version, provides rules that unify the treatment of demand guarantees across jurisdictions, resolving issues of terminology, governing law, and procedural handling of claims. It creates clarity for both guarantors and beneficiaries, reducing the risk of legal dispute and ensuring that demand guarantees operate as intended: as payment instruments triggered by compliant presentation.
Taken together, UCP, ISBP and URDG have standardised the documentary trade finance environment. They have dramatically reduced ambiguity, lowered legal risk, and enabled the growth of global commerce by establishing shared rules of engagement. They have also given banks the tools to manage reputational, operational, and legal risks in a consistent and defensible manner.
However, while these rules revolutionised paper-based trade finance, the emergence of digital trade has once again introduced fragmentation and uncertainty. The shift from paper documents to electronic records raises new questions: what constitutes presentation in a digital environment; how is control established; what happens if electronic systems fail; how do we ensure legal equivalence between paper and digital documents across borders?
In response, the ICC has extended its rulemaking to accommodate the digital reality. The most notable development is the eUCP, the electronic supplement to the UCP. First introduced in 2002 and now in Version 2.1, this framework is designed to apply UCP principles to electronic records and electronic transferable records. It mirrors the structure of the UCP but introduces key provisions to reflect the unique features of digital trade.
Under eUCP, electronic records are given equal standing to paper documents, provided certain conditions are met. It defines how documents may be presented electronically, how time-stamps and system availability affect presentation, and how the identity and integrity of electronic records can be verified. Crucially, it retains the UCP principle that banks are to examine documents, not goods, but adapts this for electronic formats, recognising the shift in how data is transmitted, stored, and authenticated.
The eUCP also addresses the issue of mixed presentations where a presentation may include both electronic and paper documents, a common scenario during the transition to fully digital trade. It ensures that such hybrid presentations are treated in a coherent and consistent manner.
What is happening now, in the digital context, mirrors the earlier standardisation brought about by UCP 600 and its predecessors. The global trade finance ecosystem is once again navigating a period of fragmentation. Multiple platforms, data formats, and legal regimes are creating complexity. The ICC’s digital rulebooks, including eUCP and its counterpart eURC (for collections), provide a stabilising force, creating the conditions for interoperability, legal certainty, and scalable adoption of digital trade.
Moreover, the development of the Model Law on Electronic Transferable Records (MLETR) by UNCITRAL, which will be addressed later in this blog, and its adoption by key jurisdictions, has further empowered the practical application of eUCP. Legal recognition of electronic bills of lading and promissory notes gives real weight to the ICC’s digital rulebooks, bridging the gap between contractual standards and enforceable law.
In essence, what UCP 600, ISBP and URDG achieved in the analogue era, namely, harmonisation and reliability, is now being replicated for the digital age through eUCP and related rules. It is a re-foundation of trust, interpreted for a world where speed, transparency, and digital verifiability are paramount. And just as the original UCP enabled the globalisation of trade in the 20th century, the eUCP and its supporting frameworks are poised to do the same in the 21st.
And now, the ICC’s more recent work, through its Digital Standards Initiative (DSI), takes this even further. The DSI is working across jurisdictions, industries, and regulators to develop globally harmonised standards for digital trade documentation and data. A key component of this initiative is the Key Trade Documents and Data Elements (KTDDE) project, which focuses on standardising essential trade documents and their data elements to facilitate seamless digital transactions across international borders.
The KTDDE project has meticulously analysed 36 pivotal trade documents, such as purchase orders, invoices, bills of lading, and certificates of origin. Through this analysis, the project has identified approximately 200 common data elements, with around 50 being widely shared across these documents. This standardisation effort aims to reduce inconsistencies, enhance interoperability, and promote the adoption of digital solutions in global trade. By implementing the KTDDE framework, businesses can expect a more streamlined and efficient trade process, minimising errors and fostering trust among trading partners. This initiative is a significant step towards a more connected and resilient global trade ecosystem.
Meanwhile, the legal architecture is being reshaped by UNCITRAL’s Model Law on Electronic Transferable Records (MLETR). This framework, adopted by a growing number of jurisdictions, ensures that digital documents such as bills of lading and promissory notes are treated as legally equivalent to their paper counterparts. The UK’s Electronic Trade Documents Act of 2023, built on MLETR principles, has set a powerful precedent, particularly given English law’s global reach in trade contracts.
Collectively, these approaches are doing the foundational work required to build a standardised, legally robust, and technically interoperable trade ecosystem.
Data
At the heart of any standardised trade finance system is data. Without consistent data models, even the most sophisticated digital platforms cannot operate at scale. Disparate systems cannot talk to one another, compliance processes cannot be automated, and interoperability remains a distant ambition.
This is why data standardisation has become a priority across the industry. The ICC, ITFA, and the WTO have all backed the development of open, structured data sets tailored to trade finance. Sector-specific initiatives, such as the Digital Container Shipping Association (DCSA) and FIATA, are aligning logistics and freight data with trade documentation. These efforts are not peripheral; they are critical infrastructure.
Digital supplements such as eUCP and eURC are also shaping how traditional trade instruments can evolve into digital-native equivalents. These frameworks guide how digital documents are created, authenticated, presented, and interpreted. They serve as the bridge between legacy practices and the future of electronic trade.
With standardised data, covering everything from invoice elements to shipping instructions to ESG indicators, banks can automate document checking, digitise compliance, and build smarter, more responsive systems. It is the new foundation on which digital trade finance must stand.
Legal harmonisation
Legal uncertainty has long been the critical vulnerability of digital trade. In many jurisdictions, transferable records still require physical form to be considered legally valid. This has created a global patchwork, undermining confidence in digital instruments and impeding their adoption.
MLETR represents a turning point. By establishing legal equivalence between paper and electronic records, it offers a common legal foundation upon which digital trade can thrive. The UK’s Electronic Trade Documents Act is especially significant. As English law underpins a vast portion of global trade contracts, its endorsement of electronic documents sends a clear signal: digital trade is not a future aspiration, it is now a legal reality.
Wider MLETR adoption will accelerate legal harmonisation, reduce counterparty risk, and provide the certainty needed for investment in digital infrastructure.
Platforms
Alongside legal and data standardisation, the emergence of trade platforms is creating a more structured market infrastructure. These platforms are not merely digitising trade, they are encoding standardised practices into their core architecture.
Traydstream is actively shaping trade finance standardisation by integrating AI-driven automation with global regulatory frameworks. By bridging gaps between financial and physical supply chains, Traydstream ensures adoption of scalable, fraud-resistant standards while supporting industry initiatives such as those developed by the ICC.
Before ceasing operations, Contour digitised the documentary credit lifecycle using workflows based on UCP 600. By enabling real-time collaboration between banks and corporates, it reduced cycle times and eliminates reliance on physical documents.
Electronic bill of lading platforms, such as ICE Digital Trade (formerly essDOCS), WaveBL, and CargoX, are bringing digital bills of lading into the mainstream. Many now comply with MLETR standards and utilise blockchain-based audit trails to ensure document control and integrity. TradeLens, despite its closure, helped catalyse a wave of platform development focused on integrating shipping and trade finance data. Newer platforms are building on that legacy, offering greater visibility across the end-to-end trade journey.
Meanwhile, Komgo and similar FinTechs are also providing modular services, KYC repositories, digital document exchanges, and compliance engines, built to common standards and designed to integrate with banks’ existing systems.
This ecosystem of platforms is reinforcing the standardisation agenda. The more these solutions are adopted, the more common frameworks take hold, then the more competitive disadvantage is felt by those who remain siloed as digital islands.
Expertise
Technology and regulation may set the direction, but people determine the pace. True standardisation requires a cultural shift within trade institutions. It demands that bankers, compliance officers, and operations teams move from seeing trade finance as a bespoke, artisanal craft to a scalable, digital discipline.
Historically, value was placed on individual expertise, and the ability to navigate unique documents, manage exceptions, and interpret ambiguous clauses. Standardisation challenges this paradigm by replacing individual variation with process integrity, and rewarding consistency over customisation.
This is not a diminishment of skill, but more an evolution. Institutions must now train their people not only to work with new systems but to understand why those systems matter. Legal teams must understand MLETR. Compliance functions must adapt to standardised data models. Relationship managers must embrace digital documentation as a competitive differentiator, not a procedural hurdle.
Leadership plays a central role here. Banks that embed standardisation into their strategic vision by investing in training, aligning departments, and measuring progress, will emerge as leaders in the next generation of trade finance.
What comes next?
Several key developments are likely to define the next phase of this journey.
Widespread adoption of MLETR and its equivalents such as ETDA will continue, particularly in jurisdictions that want to attract trade flows and fintech investment. This will normalise digital documents as enforceable and trusted.
Cross-border KYC will become more interoperable. Initiatives using the ever-growing important Legal Entity Identifier (LEI), combined with verifiable credentials, will allow parties to share credentials once and re-use them globally, thereby accelerating onboarding and reducing friction.
Regulatory convergence will become more visible. Multilateral bodies such as the Financial Stability Board and the World Economic Forum are promoting alignment in ESG disclosure frameworks for trade-related activity. Sustainability-linked trade finance will depend on standardised metrics and processes.
Tokenisation of trade assets, while still emerging, will gain traction. Programmable trade instruments, issued, distributed, and settled on blockchain, will simplify compliance, expand liquidity, and attract new investors.
And finally, we will see increased collaboration between public and private actors. No single organisation can drive standardisation alone. Governments, regulators, banks, corporates, logistics providers, and technology firms must co-create the frameworks, metrics, and platforms that will shape the future.
Conclusion
Trade finance is being re-written. The tolerance for fragmentation, non-interoperability, manual inefficiency, and legal ambiguity has reached its limit. In its place, a new architecture is emerging, grounded in shared standards, shaped by technology, and legitimised by law.
Standardisation is not the enemy of innovation; it is the catalyst. By enabling interoperability, it reduces cost and ensures trade is faster, safer, and smarter.
The institutions that embrace this shift, investing in platforms, legal understanding, and cultural readiness, will lead. Those who resist may find themselves out-paced, out-manoeuvred, and irrelevant.
What we are building is not just a better trade finance system; we are building the infrastructure of trust that global trade depends on.
And Traydstream is at the core of this exciting ecosystem.
Dave Meynell
