Digitalisation in global trade continues to expand as regulators, financial institutions and corporates adjust to legal, operational and technological shifts. The recognition of electronic transferable records is advancing, although adoption remains uneven and dependent on national legislation. At the same time banks are redesigning internal processes to support digital documentation, automated verification, structured information flows and emerging forms of conditional execution.

Bank of America’s Siddharth Gupta, head of Financial Institutions Group for Asia Pacific, and George Fong, head of trade finance for Asia Pacific, provided insights on how the bank is approaching digital transformation in trade finance, how it interprets the constraints and opportunities within the broader ecosystem, market readiness, regulatory uncertainty, operational redesign and the potential role of platform-based connectivity and event-driven settlement.

The transition to digital trade is not linear. Some jurisdictions have introduced Model Law on Electronic Transferable Records (MLETR)-aligned frameworks, while others remain in evaluation stages. Clients use different types of documentary instruments, and many do not rely on negotiable or title documents at all. This reduces the immediate applicability of electronic equivalents and requires banks to adopt flexible solutions that accommodate paper and digital information simultaneously. Bank of America’s approach reflects these realities, focusing on legal alignment, automation, data-driven processing and collaborative models built on shared infrastructure.

Legal recognition and the adoption of electronic transferable records

Legal frameworks remain the primary determinant of how quickly trade documentation can transition from paper to digital form. Gupta observed that “most countries don’t actually recognise the transfer of titles digitally” and noted that only a limited number of jurisdictions have implemented MLETR-aligned legislation. He described Singapore and some South Pacific markets as early adopters and said Hong Kong, China and Japan were “in pretty advanced stages of adopting the framework”. This pattern creates uneven conditions for cross-border transactions, where electronic instruments may be recognised in one jurisdiction but not in another.

The recognition of electronic transferable records provides legal certainty that documents such as letters of credit, guarantees and bills of exchange retain their enforceability when issued or transferred digitally. Without consistent alignment, banks must maintain parallel processes for paper and electronic versions of the same instrument. Gupta acknowledged this gap and highlighted the importance of broader regulatory adoption to enable more consistent digital practices across borders.

Client readiness is another constraint. Fong noted that a number of clients “do not currently use negotiable instruments or even title documents in their trade transactions”. This affects the adoption of electronic equivalents, since digitisation is most valuable when clients rely on documents that record ownership, transferability or conditional obligations. The absence of standardised formats for these instruments further complicates adoption, especially in multi-party chains involving shippers, carriers and consignees.

The shift towards electronic transferable records therefore depends on regulatory alignment and on the extent to which clients adopt documentary instruments that benefit from digitalisation. Bank of America’s position reflects the practical need for legal clarity and industry standards that allow digital documents to move reliably across borders and platforms.

Automation, AI and the restructuring of documentary workflows

Operational redesign is central to Bank of America’s digital strategy. Automation now plays a major role in reconciling information from purchase orders, shipping documents and financial records. Fong described how the bank’s open-account automation platform processed “about 120,000 purchase orders” and “30,000 transactions” year-to-date, achieving “96.2%” straight-through processing. This reduces the reliance on manual checks for repetitive tasks and allows operations teams to focus on exceptions and discrepancies.

In supply-chain financing, automation reduced processing time “by 40% in terms of processing time without manual intervention”. These efficiencies rely on the ability to extract structured information from documents and apply validation rules that determine whether payables are eligible for financing. Gupta added that the bank is working with a fintech partner to enhance its anti-money-laundering and document-checking processes through natural-language processing and optical character recognition, which help convert unstructured information into machine-readable formats.

Automation is also enabled by connectivity. Application programming interface (API)-based integrations allow clients to retrieve real-time invoice and transaction information and support the exchange of shipping data between logistics providers, fintech partners and Bank of America’s internal systems. This reduces delays and strengthens transparency in supply-chain events.

The bank’s focus on automation reflects a broader trend in which documentary trade is moving toward data-driven processing. These capabilities provide a foundation for more advanced forms of conditional execution as the ecosystem becomes more aligned.

Interoperability and the movement of structured information across platforms

Interoperability is essential for digital trade, given the number of independent systems involved in moving goods and verifying documentation. Fong pointed to the absence of standardised formats for negotiable instruments and title documents as a major cause of slow adoption. Without shared data definitions, each party has different document datasets, slowing processing and increasing the burden of digital data exchange and reconciliation.

Bank of America is addressing these challenges through a federated platform model. Gupta said the bank is building a “digital trade network with multiple parties working together”, connecting fintech partners to a proprietary infrastructure that holds data on bills of exchange, bills of lading and other documentary instruments. This shared environment allows participants to access and process information using consistent rules.

Fong added that the model is designed to “enable other banks to participate”, which reflects an industry direction towards collaborative infrastructure rather than closed, institution-specific systems. Interoperability is further supported by the bank’s use of APIs for supply-chain financing and open-account automation, allowing key data to move between clients, logistics providers and Bank of America with greater accuracy and timeliness.

These priorities indicate a shift towards systems that can support structured data flows across heterogeneous platforms. The bank’s approach demonstrates how institutions can build functional connections in the absence of complete standardisation, while still preparing for a more aligned ecosystem.

Conditional execution and the development of event-driven settlement

Conditional execution is becoming a central feature of emerging digital-trade models. It refers to the ability to trigger actions such as payment release when documentary conditions are met. In Bank of America’s open-account automation solution, clients set conditions that determine how information in purchase orders interacts with shipping and financial data. These conditions are encoded into smart contracts on a blockchain-based infrastructure, enabling automatic execution once the validation criteria are satisfied.

Fong explained that the platform verifies data from purchase orders, shipping events and invoices and automates payments when these elements align. This reduces manual intervention and supports more predictable settlement outcomes. The mechanism depends on accurate data extraction and validation, showing the link between automation and conditional execution.

The concept extends beyond open-account models. Fong noted that similar principles could apply to bills of exchange, export letters of credit and standby letters of credit, although he said commercial adoption “will take a bit longer”. Broader application requires more consistent legal recognition, harmonised data structures and industry agreement on how event-driven workflows should operate.

Gupta said the medium-term direction will involve greater use of blockchain, tokenisation and smart contracts to support event-driven and atomic settlement. These technologies align with the sector’s move towards more structured data, integrated workflows and programmable conditions for execution.

Conditional execution remains at an early stage of development, but it illustrates how digital documentation and structured data can converge to support new settlement models across trade finance.

Regulatory, data-governance and ecosystem priorities for 2026

Several regulatory and ecosystem priorities will shape digital-trade development in the coming year. Gupta said that further adoption of MLETR-aligned frameworks in Asia Pacific would lay the foundation for broader recognition of electronic transferable records. Clearer legal treatment would allow banks and corporates to adopt digital instruments with fewer jurisdictional constraints.

Fong highlighted data-governance issues as an important challenge. He said there is a need for “better global standards for cross-border data flows” and noted that data-localisation and privacy requirements in some markets complicate the digitalisation of trade. He also pointed to the importance of standardised cybersecurity frameworks, which would help align expectations across regulators and institutions.

Collaboration across public and private actors remains essential. Fong emphasised the role of logistics firms, customs agencies and ports in supporting integrated digital workflows. He also noted that technology infrastructure must evolve to handle the data exchange required for large-scale digital trade. Further investment will be needed to develop, test and commercialise new models.

These priorities reflect the conditions that will influence adoption in 2026. Legislative alignment, standardised data governance and multi-party integration will determine the pace at which digital documentation and conditional execution gain practical traction.

The path forward for digital trade

Bank of America’s Fong and Gupta see the current state of digital trade as a transition from fragmented paper-based workflows towards structured electronic documentation, automated verification and event-driven settlement. Legal alignment remains uneven and shapes the extent to which electronic instruments can be recognised across borders. Operational readiness varies across clients and requires solutions that can accommodate both paper and digital formats.

Automation and artificial intelligence are reshaping documentary processing and providing the foundation for conditional execution. Interoperability is emerging through platform-based connectivity and APIs, even in the absence of full standardisation. Conditional execution illustrates the direction of travel, although broader adoption will require consistent data structures, shared rules and regulatory clarity.

For 2026, Bank of America’s priorities include wider legal recognition of electronic transferable records, stronger data-governance frameworks, deeper integration across supply-chain actors and the development of infrastructure that supports programmable and event-driven settlement. These factors will shape how the digital-trade ecosystem evolves and how financial institutions redesign processes to support more predictable and efficient trade flows.