Lloyds Bank is enabling corporate customers to request digital Guarantees or Standby Letters of Credit under a new 'Paperless Guarantee' initiative.
The paper-free suite has been developed to support businesses who have a high volume of transactions requiring bank guarantees to be issued, promising instant delivery to recipients and operational and cost savings.
This is Lloyds Bank’s latest investment in supporting the move towards digitising trade and closely follows its successful completion of the first digital trade transaction under the UK’s new Electronic Trade Documents Act (ETDA) when it came into force last month. Lloyds Bank was also the first in the UK to complete a transaction utilising a digital promissory note purchase in August 2022. Last month, the bank also invested €3 million in technology company Enigio to expand its use of digital documentation in trade.
Gwynne Master, head of lending, trade & working capital at Lloyds, comments: “By working closely with our clients and their buyers and their sellers, we have a deep understanding of the nuances and challenges of trading internationally. Our latest development, the Paperless Guarantee initiative, offers clients a solution to some of those challenges. It is much more efficient, saves time, and removes costs. Removing the need for the physical delivery of paper is the future of trade and we are proud to be supporting our clients to achieve his with our new initiative.”
UK travel trade body Abta is currently working with Lloyds to switch to a paperless format and is aiming to introduce this new process to other approved bond providers. When fully deployed, it estimates the change could eliminate the use of at least 3,500 pieces of paper each year.
Rachel Jordan, director of membership and financial protection at Abta, says: “As one of Abta’s approved bond providers, this initiative will not only speed up the bond renewal process for Abat members who are Lloyds Bank clients, it will also result in operational efficiencies and cost savings.”