Trade volumes have more than quadrupled since 1990. Increased Trade is the most prominent driver for prosperity, which helped lifting more than 2bln people out of poverty on a global scale.

Written by Daniel Cotti, Managing Director, Centre of Excellence, Banking and Trade, TradeIX

Despite of growth and progress in digitalization, trade administration is fundamentally unchanged since then. Paper-based processes cause frictions, efforts and open windows for fraud, and trade-based money laundering. Enforcing and managing tax compliance, environmental standards and social objectives are causing severe overheads on businesses, for most processes still being manual. Many regulations lack effective control in the absence of law enforcements’ required staff capacities. Sustainability promises in the form of “certificates” remain a matter of trust, while premiums are asked and paid.


Moreover, despite trade having been globalized, legislation and policies have remained localized, forming a patchwork of regulations and causing further impediments and uncertainties to trade parties. Often law and legal ordinance explicitly stipulate the use of paper-based instruments, where there is no longer a need to.

Fully digital processes and instruments in trade promise to alleviate most of these hindrances. In many industries, various consortia have been and are being formed to communally work on building digital solutions to replace paper-based processes. The term coopetition has been coined to describe a two story phenomenon: Cooperation on the ground floor to build business networks and establish digital standards for commonly exchanged information to level the playing field for competition on the upper floors.

Digitalization has been ongoing for some decades, and also standards for digital interchange are nothing new. EDIFACT and its various message types have been around for 30 years.

However, digital density has now reached a higher level. Fueled by a rapidly advancing set of technologies, such as Elastic Computing (Clouds), ubiquitous sensors and actuators (IoT), distributed database protocols providing technical trust (DLT; Blockchain), and algorithms delivering unprecedented insights and reasoning powers (Artificial Intelligence), just to name a few, further acceleration can be expected.

This development is compounded by ubiquitous networks, which bring about broadband hyper-connectivity at low latencies. The convergence of the set of technologies will produce non-linear, and unforeseeable effects on businesses and business models. A large variety of organizations is creating and conceiving digital standards for trade. Often these standards serve a similar purpose or even compete. So, not only are new digital standards required but also deflation and confluence of existing standards seem needed.

By establishing the Digital Standards Initiative (DSI), the ICC has now taken the lead on digital trade standardization.

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