Digital Bank Guarantees and their Impact on Trust Building in B2B Transactions

Author Details-

Adarsh Kumar Singh

Student, Amity University, Chhattisgarh

singhkumaradarsh04@gmail.com

Co Author Details-

Dr. Ram Kumar Sahu

Assistant Professor, Amity University Chhattisgarh,

ramminto345@gmail.com

Abstract:In the contemporary landscape of global trade finance, the transition from traditional, paper-intensive instruments to digitalized solutions represents a fundamental paradigm shift. This research provides a comprehensive empirical investigation into the impact of Digital Bank Guarantees on the construct of trust within Business-to-Business (B2B) transactions. Despite the criticality of bank guarantees in mitigating performance and credit risks, traditional systems are often plagued by manual inspections, high operational costs, and susceptibility to document counterfeiting . This study utilizes an advanced conceptual framework where DBG adoption serves as the independent variable, with transparency, security, and transaction efficiency as mediating factors influencing the dependent variable: B2B trust. Employing a descriptive and analytical research design, primary data was gathered from 185 senior finance managers, exporters, and procurement professionals through a structured 5-point Likert scale instrument. The statistical evaluation, conducted via SPSS, involves Cronbach’s Alpha for reliability, Pearson Correlation, and Multiple Regression analysis. The findings reveal that digital initiatives in trade finance significantly reduce fraudulent transactions by 42% and improve settlement efficiency by 58%, which directly correlates with enhanced partner confidence . The mediation analysis highlights that transaction security and transparency are the most potent drivers of this trust-building process, as blockchain-enabled platforms provide an immutable, "single source of truth" that mitigates information frictions . By shifting the basis of trust from human-intermediated verification to decentralized, tamper-proof technological protocols, DBGs offer a robust framework for organizational resilience in the digital era. This paper concludes with strategic recommendations for policymakers and industry leaders, emphasizing the necessity for harmonized digital standards to optimize cross-border B2B relationships.Keywords: Digital Bank Guarantees, B2B Trust, FinTech, Blockchain, Trade Finance, Smart Contracts.