Published: October 14, 2026
Can digitalisation and AI finally modernise trade finance, while maintaining the trust, security, and resilience upon which global trade depends? Christian Cazenove, Head of Group Trade Oversight & Advocacy, Societe Generale, and Associate Professor, University Paris XII, UPEC - AEI International School evaluates an industry at a pivotal moment.
Globally, all trade finance participants today are at a crossroads and have a choice to make. If they want to, they can stay with the tried and trusted manually intensive paper-based mode, despite the inefficiencies, delays, errors, and risks it carries.
Alternatively, the industry can start working together to bring about a digital revolution. As with other financial processes that have seen fit to move in this direction, doing so means ironing out the issues as well as leveraging the numerous advantages of a new and evolving ecosystem.
At a technological level, what is required to digitalise trade finance already exists. The desire to progress has also already been expressed. But only a small number of banks, corporates, and platform providers are currently engaging in exploratory projects, most of which are standalone schemes.
Understandably, the corporate community wants to see any proposed digital infrastructure in action before it makes a commitment. But until more corporates step up, small-scale proof-of-concept projects are all they have to go on. For many, it’s not enough to enable them to take that leap into the future.
Until the whole industry has a change of mindset and starts working together, the banks, corporates, vendors, regulators, and other associated trade partners will remain essentially bound to the paper trail.
It’s evident too that trade finance participants are currently operating in an environment characterised by increasing geopolitical tensions and sanctions. This is creating deeper trade and supply channel fragmentation, for which traditional SCF processes are not best equipped. And on top of this, mounting pressure is being applied by new and evolving regulatory and compliance requirements.
It’s a challenge for all stakeholders. And yet global trade figures remain remarkably resilient, with companies continuing to rely on trade finance solutions to (as the International Chamber of Commerce [ICC] defines) “facilitate international trade flows through banks’ commitments and mitigants, import and export loans, and insurance mechanisms”.
By the end of 2025, UN Trade and Development (UNCTAD) figures show trade flows expected to reach $35tr. This is an increase over 2024 of 7%. “Trade finance and trade activity remains robust despite multiple headwinds,” comments Cazenove. The International Monetary Fund’s forecast figures for 2026, he notes, are already on track to surpass those of 2025 by 3.5%.
Against a backdrop of increasing trade in a tougher environment, digitalisation is surely becoming a strategic imperative, he posits. But he recognises that the argument for a digital revolution circles back to the stubborn grip of ‘comfortable’ paper-based processes on many trade finance transactions. Its grasp is held strong by globally uneven legal frameworks for digitalisation, limited interoperability between platforms, and growing fraud and cyber risks that undermine trust across the markets.
But now AI is being added into the mix, will it be the catalyst for change? It is already being used in compliance screening, AML monitoring, and document processing, notes Cazenove. But he sees it as a technology with the potential to ultimately take trade finance towards “a far more efficient and scalable place”.
But what is still not currently clear to him is the industry-wide will to bring all the necessary components together, and make them function as one. Indeed, he states, “it really does need a complete change in mindset”.
Despite increasing trade flows, trade finance remains wedded to paper and manual processes. Only 10% of bills of lading are currently being issued digitally, and the industry is still exchanging more than four billion paper documents annually.
The rules laid down by the ICC are complex and many. In order to scrutinise LC documentation, it typically takes up to two hours per transaction. It’s one reason why open account transactions reign supreme within B2B. By contrast, digital processes have become the norm in most cross-border consumer transactions. Cazenove believes these trends will eventually extend to trade finance, although decades of entrenched paper-based practices cannot be replaced overnight.
In 2017, the United Nations Commission on International Trade Law (UNCITRAL) brought to the world its Model Law on Electronic Transferable Records (MLETR). Under its guidance, ‘dematerialised’ documents (i.e. digital) took on the functional equivalence of their paper counterparts. It sounds ideal. But to date, only 13 sovereign states have adopted MLETR, albeit with a majority percentage of global exports originating from economies that have either adopted, aligned with, or committed to aligning with MLETR.
It’s worth noting, Cazenove adds, that while Asia, Europe, and America are moving ahead, no African country has yet signed up to MLETR. This is despite the continent being a voracious consumer of trade-related instruments – documentary collections and LCs in particular, but also guarantees and standbys – for regional cross-border commerce.
But perhaps most significantly, as a member of several ICC working groups looking at digitalisation, Cazenove says he, and many other banking members, are facing the same challenge. Identifying companies within their client portfolios that are willing to actively explore digital trade finance mechanisms, is a serious challenge.
“This is the reason why so far we have so few proofs-of-concept, and even then they are mostly in Asia and focused on commodity businesses,” he explains. “But to move further forward, we need to provide empirical evidence that it works.”
The level of interest in the digitalisation of trade finance is clearly demonstrable among most corporate clients. Between November 2022 and March 2023, Cazenove’s ICC working group interviewed more than 100 companies. “Whatever the size, sector or location, they all said the same thing: we want to go digital,” he reveals. The report was released in June 2023 to the French government, leading to the adoption in France of MLETR in June 2024.
“With multiple functions to bring on board – including sales, purchasing, finance and accounts, legal, and global management departments – we are dealing with a process that has for so long operated for all of them almost entirely on paper,” explains Cazenove. “So, it’s not only necessary to convince trade-related departments to digitalise, but we must also convince all other functions in the company. And as we have already declared, it’s hard to identify corporates willing to proceed if they can’t first see it in action.”
Despite the evident challenge in finding corporates ready to move ahead with a live project, Societe Generale was able in July 2026 to announce one of the first fully digital LCs between the UK and France. It involved Lloyds, the Enigio platform, and industrial firm Bobst Lyon in France.
“It worked exactly as it should, in fact, much better than I expected,” comments Cazenove. “Even among professionals with decades of experience in this area, there was real excitement about it. I’ve already been asked when do we have the next deal. So now we have to tell this story, again and again, to make sure we can bring it to many more people.”
The transaction, though successful, involved just two banks, one platform, and covered a single region. The next stage is to work towards interoperability across multiple partners and regions. Currently, Cazenove describes landscape readiness for this as “immature, but building positive momentum”.
With the digital trade ecosystem remaining fragmented, spread across a market of around 15 operational trade platforms, he harbours no expectation that a single industry provider will emerge. Instead, he sees the industry “having to build an ecosystem based on multi-platform interoperability”.
Of course, finding buyers and sellers who wish to digitalise, then securing the agreement of platform providers in different geographies that wish to co-operate, all within acceptable domestic legal frameworks, remains a substantial hurdle. Is there a role for AI in facilitating smoother trade flows?
AI is already playing a growing role in trade finance, from strengthening AML and counter-terrorist financing controls to reducing operational friction. At Societe Generale, it is also used for sanctions and maritime screening, helping verify vessel routes and ownership. As its capabilities continue to advance, AI is expected to accelerate the digitalisation of trade finance processes.
“Today, just 10% of bills of lading are electronic,” notes Cazenove. “As an industry, we can’t pretend to be using the full advantage of AI when the trade finance ecosystem maintains such a heavy reliance on paper. But we are making meaningful headway in that direction.”
AI-assisted automation of document checking is gaining ground as tools such as OCR, NLP, ML, and generative AI (GenAI), are being pressed into action. These can be beneficial for a key trade instrument such as an LC. Checking for LC compliance with the ICC’s Uniform Customs and Practice for Documentary Credits (UCP) rules, and dealing with any amendments, is time-consuming. This documentary inefficiency is replicated across the full trade ecosystem.
Using digitalisation and AI across the board to facilitate automation could reduce typical two-week transcontinental process delays to just three or four days, says Cazenove. Indeed, with the Bobst case, he reports that every document exchange and amendments took a few minutes only instead of several days, with one communication with Lloyds Bank taking minutes instead of the usual two or three days.
A further interesting point is raised by Cazenove about the future of trade finance. He warns that as a sector still heavily dependent on paper, it risks becoming less attractive to younger talent. “If we don’t all move faster toward digitalisation, within 10 years, we may not survive as a sector.”
However, the good news is that in banks such as Societe Generale, the attitude to this much-needed upgrade is “extremely enthusiastic.” As stated, the technical element is not a barrier. But, states Cazenove, “we will continue to invest in and solve each and every challenge”. The mindset of an industry wedded to paper is also slowly evolving, he notes, as “more trade participants now really want to go digital”.
The success of trade finance rests on the confidence that banks are able to give to their corporate clients to engage in business. After the success of the 100% digital LC-based transaction between Societe Generale, Lloyds and Bobst, Cazenove understands the importance of sharing the experiences and building on its momentum. “We can now prove that this is not just a proof-of-concept but a working, fully digital real-world solution.”
It is one that, with further adoption, can begin to substantially reduce the time it takes for trade between cross-border counterparties, and lower the risk at every stage of that transaction. While Cazenove acknowledges that trade guarantees and standby LCs may not benefit from digitalisation (only around 3 to 5% of guarantees are subject to a claim), LCs and documentary collections are prime candidates.
With the latter being notably common in trade within African territories, for instance, there is much ground for improvement here. A documentary collection enables a seller’s bank to control shipping documents, releasing them – and the goods – only when the buyer pays or irrevocably promises to pay. By taking this path, no longer will checking and movement of physical documents hold up the process; digitalisation brings speed and efficiency.
Many trade participants currently prefer open account transactions because they involve significantly less paperwork and administrative burden compared to methods such as LCs and documentary collections. But in doing so they are also exposing those trades to increased risk.
The pursuit of the digitalisation of documentary trade is therefore not only about speed and efficiency, it is also a matter of better mitigating risk and, by extension, growing trade volumes. If process-by-process, country-by-country, the uptake and interoperability of digitalisation moves towards critical mass, it will be beneficial to all.
As Cazenove comments: “When we go digital, we finally make that choice to emerge from this archaic world, to the benefit of the whole ecosystem”.
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