Lloyds Bank and Enigio launch new trade digitization partnership

Lloyds Bank and Enigio have launched a new long-term partnership to support greater use of digital documentation in trade finance through the use of blockchain technology.

Through the partnership, Lloyds Bank and Enigio will look to expand the use of Enigio’s trace:original solution for digital original documents, including promissory notes, bills of exchange and bills of lading. It will also explore opportunities to display traces: original documents within wider trade finance products, such as documentary collections and credits.

By removing the need for physical transfer of documentation within trade transactions, Lloyds Bank aims to deliver faster, cheaper, flexible, sustainable and secure digital trade solutions for customers.

Enigio’s trace:original solution enables the creation of digital documents that can be “owned” by an individual, transferred between parties and originals can be distinguished from copies, just like paper-based counterparts. This means that digital documents can be used in processes where an “original” document is required. Unlike other digital trade solutions that require all parties to subscribe to digital platforms, Enigio’s solution only requires that the party creating the document is an Enigio user.

Lloyds Bank’s work with Enigio is part of its ongoing digital strategy and paperless trading initiative and follows the successful completion in August 2022 of the UK’s first transaction using a digital bond purchase.

This pilot transaction, which was also the first under the International Trade and Forfaiting Association’s (ITFA) Digital Negotiable Instrument Initiative (DNI), saw the sale and purchase of land worth £48m completed between multiple UK businesses in a single day. The underlying promissory note was issued using trace:original.

In February 2023, Lloyds Bank also shared its learning and experience in electronic payment undertakings (ePUs) under the DNI initiative to help fintech group Mercore complete the UK’s first digital exchange transaction, which was also carried out through trace:original.

Gwynne Master, Managing Director, Lending and Working Capital, Lloyds Bank, said: “We are pleased to have taken another major step in our quest to digitize commerce. This partnership further solidifies our relationship with Enigio as we continue to expand the document types and underlying flows that will use ‘trace:original’ documents.”

“Existing industry-wide trade solutions are by comparison much slower, more cumbersome and more environmentally intensive than their digital counterparts, involving upwards of 28 billion pieces of paper, globally each year. Digitization makes processes faster, cheaper and more secure. We support the adoption of digital trade documents and look forward to to work broadly with our customers and partner banks to support their continued use.”

Patrik Zekkar, CEO of Enigio, said: “We are delighted to enter into a long-term partnership with Lloyds Bank, as it has been instrumental in the journey to improve trace:original to meet current and future demands for the digitization of trade documents and the trade value chain.

“Together taking an industry perspective in the continuous improvements of trace:original, as well as Lloyds Bank’s open, collaborative approach, inviting and sharing experiences, demonstrates a wider commitment to driving the digitization agenda in trade. We very much look forward to continuing this beneficial the journey with Lloyds Bank and the trading community in general with the greater purpose.”