From Templates to Artificial Intelligence: the Future of Bank Guarantee Drafting

Abstract

The paper investigates the potential transformation of bank guarantee text drafting in the context of the digital transformation of trade finance. It proposes a three-stage framework comprising template-based manual drafting, AI-assisted template completion, and final human validation (human-in-the-loop). The analysis indicates that while AI can enhance efficiency, it may also increase legal and operational risks and introduce new challenges related to accountability and oversight. The paper advocates for the institutionalization of a managed repository of standardized clauses, improved validation mechanisms, a traceable audit trail of changes, and mandatory human review. The study is grounded in the author's professional experience and is characterized by a recommendationoriented approach, with a particular emphasis on the human role, control mechanisms, and the allocation of responsibility. For the Georgian banking sector, the paper provides a forward-looking perspective on achieving process rationalization and efficiency gains while concurrently managing risks.