Trade digitalisation: Not a tech problem anymore!

For more than a decade, trade digitalisation has been positioned as inevitable, given the benefits it promises: smoother processes, improved transparency, and better access to finance.

Platforms have multiplied, application programming interfaces (APIs) have matured, blockchain pilots have come and gone – yet global trade finance remains stubbornly paper-heavy, manual, and fragmented.

This is not so much a technological failure. Rather, digitalisation has stalled because the core challenges in trade are legal, data‑related, interoperability‑driven, and risk‑based.

Which begs the question: what is the real state of trade digitalisation? What has genuinely progressed, what continues to block scale, and what does a realistic future look like?

A good carpenter never blames his tools

Trade digitalisation is no longer a technology problem; the tools already exist within the industry. Logistics workflows are digital. Customs systems in most major economies are electronic. Shipment events are captured in real time. Electronic trade documents – bills of lading, invoices, packing lists – can be generated, stored, transferred, and audited securely. 

Access control, encryption, and audit trails have also matured. In many cases, paper documents are printed outputs of digital systems. 

So why does paper persist? 

Because paper still resolves enforceability, control, and trust more effectively than most digital alternatives when things go wrong. Trade does not fail along the “happy path”; it fails in disputes, defaults, fraud cases, and insolvencies. Technology has evolved faster than risk appetite.

Legal enforceability is the real gating factor.

Digitalisation can only scale when a digital record stands up in court. For trade finance, this requires a legal equivalent to paper, clear definitions of control and possession, and enforceability in a default scenario – conditions many countries have yet to meet. 

Does it work at all? 

Markets such as Singapore and the UK have adopted MLETR-aligned laws that explicitly recognise electronic transferable records. Banks are financing against eBLs, insurers accept them, and courts recognise digital control. But the number of real‑world cases remains limited.

Meanwhile, markets like India, China, Indonesia, and Bangladesh have digitised processes but still rely on paper originals for negotiability and enforcement.

Across the industry, banks may accept digital documents operationally, but require paper for collateral and title. This is why pilots succeed, but scale does not: no bank wants to be the first to test an unproven digital document in court.

Why MLETR helped, but didn’t transform everything

The UNCITRAL Model Law on Electronic Transferable Records (MLETR) was a watershed moment. It made digital trade documents legally possible. 

While MLETR enables digital equivalence, it does not mandate adoption  or rewrite insolvency and evidence laws, or court behaviour. Even with adoption, markets still need alignment across judicial processes, regulators, and industry risk frameworks. MLETR turns the legal switch on, but the commercial machine still needs time to start.

Data laws: Not a trade problem, but a design problem

Most data laws regulate personal data, not trade data. But trade workflows often contain both, such as personal identifiers alongside trade data – shipment milestones, bill of lading (BL) status, and invoices, and the like.

Cross-border digitalisation breaks down when platforms default to “collect everything, share everything” architectures. Data minimisation and event-based sharing of data are critical where data stays local, but trust travels cross-border. Global data lakes, combining and sharing personal and trade data, just take us away from problem-solving.  

Data localisation increases cost only when architectures are poorly designed. When done well, localisation is manageable and even improves security.

Systems still don’t trust each other

Interoperability in trade is often misunderstood. It is not about APIs communicating. It is about multiple parties trusting the same event enough to act on it, both financially and legally.

A typical export transaction involves the exporter’s enterprise resource planning (ERP) system, the freight forwarder platform, the carrier system, the customs system, the bank trade systems, and so on. All are digital. Yet interoperability fails because there is no shared definition of a ‘trusted event’. Identifiers don’t match, and legal recognition breaks at borders. Interoperability fails due to trust, not due to technology. 

Blockchain proved something important – immutability does not equal enforceability. Distributed ledgers can enhance integrity and provide audit trails, but they cannot create legal recognition, override national law, solve data localisation, or manage complex exceptions.

Blockchain is a tool, not a standalone solution. It only works when embedded within enforceable legal and governance frameworks.

The role of banks in practice 

Banks are often seen as blockers. In reality, banks are progressing – but cautiously and prudently. They are moving from document-based to event-based financing, accepting eBLs where enforceable, and updating risk frameworks and operating models. 

What banks will not do is finance digital claims with unclear legal standing or rely on digital documents where courts still require paper.

Banks finance defaults, not demos. Prudence is not resistance; it is survival.

At ING, our focus is on creating cross-border frameworks which are harmonised and flexible, and allow trade flows to move seamlessly across jurisdictions. This capability is one which clients are increasingly demanding from top global trade finance and transaction banking partners.

Trade digitalisation can assist in this end. Initiatives like e-UCP/ e-URC adoption allows electronic presentation of the UCP 600 rules governing letters of credit and of the URC 522 rules for documentary collection. Scaled digital‑presentation capabilities and enhanced multi‑jurisdiction digital‑document recognition can also help clients keep cash flowing and support the globalised world of global trade.

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Trade digitalisation has not failed; far from it.

Digitalisation is not about replacing paper with screens – it is about replacing paper’s legal and trust functions. Until digital systems do that reliably across borders, paper will remain.

Real progress will come not from grand platforms or universal standards, but from quiet alignment between law, technology, data, and risk.

The future of trade digitalisation will not be instant or global, but corridor-based, event- driven, and legally anchored. 

It will succeed where law recognises digital control, platforms standardise trusted events, and data is minimised and governed – and where banks like ING connect these corridors with global scale, local expertise, and a truly integrated cross-border wholesale platform.

Originally published on Trade Finance Global: Opens in a new tabhttps://www.tradefinanceglobal.com/posts/trade-digitalisation-not-a-tech-problem-anymore/