By: Dave Meynell, TradeLC Advisory

For more than two decades, the trade finance industry has pursued digital transformation. Successive waves of innovation have promised to modernise international trade through electronic documents, distributed ledger technology, artificial intelligence, digital identities, APIs, and increasingly sophisticated automation.

No doubt that the progress has been significant, with electronic bills of lading gaining legal recognition, AI now reviewing trade documents in milliseconds, digital platforms connecting participants across continents, and governments adopting legislation based on the UNCITRAL Model Law on Electronic Transferable Records (MLETR), providing legal foundations for electronic trade documents.

Yet … despite these advances, we cannot deny that adoption remains uneven.

Many transactions continue to rely upon paper, some on a hybrid environment of paper and digital. Digital initiatives often struggle to move beyond pilot programmes, and market participants frequently acknowledge the benefits of digitalisation while remaining hesitant to abandon established processes. The inertia of tradition to which I have referred many times in the past, inherited ways of working, longstanding market conventions, embedded organisational behaviours, concern over unintended consequences, and institutional comfort with paper-based practices that persist despite the availability of viable digital alternatives.

The explanation is often sought in technology, by regulation, ICC rules, or interoperability. The thing is that although each of these factors is important, they may not represent the fundamental issue.

The missing infrastructure of digital trade is trust!

Is that surprising? Well, trust is rarely discussed alongside technical standards, legislative frameworks, rule updates, or implementation roadmaps. Yet trust has always been the invisible infrastructure underpinning international trade.

Long before electronic records existed, merchants relied upon trust to transact across borders. Documentary credits, bills of exchange, transport documents, and demand guarantees developed not merely as commercial instruments, but as conduits and mechanisms through which trust could be established between parties separated by geography, language, legal systems, and/or culture.

And nothing has changed, with the modern trade finance system still remaining fundamentally a trust architecture.

Banks honour documentary credits because they trust the rules governing their operation, exporters ship goods because they trust the undertaking of a bank, importers release payment because they trust the evidence presented in documents, carriers issue transport documents because markets trust their representations, and regulators permit cross-border commerce because they trust the controls embedded within financial institutions.

Documents have never been the true foundation of trade finance. Trust has. And, as trade moves from paper to data, that fundamental truth remains unchanged.

Re-framing the digital trade debate

The digital trade conversation has traditionally focused upon replacing paper with technology. This framing is understandable but, if we are honest, it is incomplete.

•       Digitisation is the process of converting physical documents into electronic form.
•       Digitalisation is the process of persuading market participants that electronic processes can be trusted to the same extent as their paper predecessors.

The first challenge is indeed a technical one, but the second concerns trust, legal recognition, institutional readiness, and market adoption.

A digital bill of lading succeeds only when buyers, sellers, banks, carriers, insurers, and courts trust that it performs the same function as a paper bill of lading. Similarly, a digital identity framework succeeds only when participants trust the accuracy and integrity of the identities it represents. And naturally, AI succeeds only when users trust the quality, consistency, and governance of its outputs.

So, the fact is that technology may enable digital trade, but it is trust that determines whether digital trade is adopted.

This distinction possibly helps explain why some of the most technologically advanced solutions have experienced slower adoption than originally anticipated. Participants are rarely asking whether a platform functions, because more often they are asking whether the platform can be relied upon when a dispute arises, when fraud occurs, when regulators intervene, or when transactions span multiple legal jurisdictions.

All of these are fundamentally questions of trust, and trust within digital trade extends across multiple dimensions.

The five dimensions of trust

The first is identity. Participants must know with certainty who they are dealing with. This is where initiatives such as the Legal Entity Identifier (LEI) become increasingly important. While often viewed simply as identification tools, they are better understood as trust infrastructure, enabling reliable verification of legal entities across borders and systems.

The second is document authenticity. Users must be confident that electronic records are genuine, complete, immutable, and protected against unauthorised alteration.

The third is legal certainty. Participants must trust that rights and obligations arising from electronic records will be recognised and enforced by courts and regulators.

The fourth is operational integrity. Digital platforms must demonstrate resilience, security and reliability under both normal and exceptional circumstances.

The fifth is decision integrity. For example, as AI becomes increasingly involved in trade processes, participants must trust that automated assessments are technically sound, transparent in their reasoning, appropriately governed, and capable of being challenged when necessary.

Weakness in any one of these dimensions can undermine confidence in the wider ecosystem.

Why trust matters more than efficiency

Advocates of digital trade frequently emphasise efficiency gains, reduced costs, faster processing times, and improved visibility across the transaction lifecycle. These benefits are real and important. Nevertheless, history suggests that trust consistently outweighs efficiency when adoption decisions are made. A process that is faster but trusted less will struggle to achieve widespread acceptance, whereas a process that is trusted more may be adopted even if efficiency gains are modest.

This principle can be observed throughout history. Markets have repeatedly demonstrated a willingness to accept higher costs, greater complexity, slower processing, and increased friction where confidence and certainty are enhanced.

Digital trade will be no different. The technologies that ultimately succeed are unlikely to be those that are merely the most innovative. They will be those that establish the highest levels of trust among market participants.

The ICC’s continuing mission

The International Chamber of Commerce (ICC) has spent more than a century developing frameworks that enable trust in international commerce. However, UCP, URDG, URC, ISBP, ISP98, Incoterms, and the numerous other rules and practices do not create technology. What they do is create confidence, establishing common expectations, consistent interpretations, uniform handling, and predictable outcomes.

And far from diminishing the role of trust, digital trade actually elevates its importance, with the next generation of trade rules and guidance likely to focus even less on technology itself and more on the trust frameworks that surround technology. Digital identity, AI governance, interoperability principles, electronic records, and assurance mechanisms all require structures capable of generating confidence among diverse market participants.

As such, the objective remains unchanged from that pursued by the ICC’s founders, which is to create trust where trust does not naturally exist.

Do I trust this?

The future of digital trade will not be determined solely by legislation, technology, operational practice, revised rules or, even, interoperability. Important though these factors are, they represent only part of the challenge. Technology will continue to evolve, AI will become ever more sophisticated, electronic records will become increasingly commonplace, and digital identity frameworks will continue to mature. Yet none of these developments guarantees adoption.

The decisive factor remains trust. For centuries, trade finance has not been a business of documents in themselves, but a business of trust evidenced through documents. Paper did not create trust; it provided a mechanism through which trust could be established, transferred, integrated, and verified between parties separated by distance, jurisdiction, language, and time.

As trade becomes increasingly digital, the medium may change, but the underlying principle remains constant. Digital trade is not fundamentally a technology challenge seeking a trust solution. Instead, it is a trust challenge seeking more effective technology through which confidence can be created, maintained, demonstrated, and shared. The frameworks, platforms and standards that succeed will be those that strengthen trust between participants, not merely those that deliver incremental improvements.

Ultimately, trust is not simply one component of the digital trade ecosystem. It underpins legal recognition, supports institutional acceptance, enables market participation, and gives parties the confidence to transact. The future of digital trade will therefore belong not to the technologies that are most advanced, but to those that are most trusted.

And why? Because every participant in a trade transaction is ultimately asking the same question, “Do I trust this?”

Trust, trust … and then more trust.

The discussion may often begin with technology, yet market participants rarely wake up in the morning thinking, “I need more technology.” What they do think is, “I need less risk.”