Finastra, R3 and Seven Banks to Create DLT Platform for Syndicated Loan Marketbr>
Finastra, R3 and seven major banks are working together to create a distributed ledger technology (DLT) platform for the syndicated loan market. It is expected to launch next year. The participating banks include BNP Paribas, BNY Mellon, HSBC, ING, and State Street.
The solution is called Fusion LenderComm and it is underpinned by R3’s DLT platform Corda. The solution exposes real-time credit agreements, accrual balances, position information, and detailed transaction data to lenders directly from agent bank loan servicing platforms such as Finastra’s Fusion Banking Loan IQ.
Fusion LenderComm aims to reduce the operational cost and burden of agent-to-lender administration and deliver self-service capabilities to lenders, providing information on-demand to optimize loan portfolios.
The Fusion LenderComm pilot phase enabled agent banks to publish loan data to the DLT platform and extend these self-service capabilities to lenders. Through their own portal, agents can define and then publish lender-specific deal position data to Fusion LenderComm, so individual lenders can drill down into the data without needing to query positions on the phone or via email, as is typical today.
The solution digitizes communication with lenders – driving efficiencies in the process, saving agents time and money, and eliminating operational risk. Data is securely transferred within Fusion LenderComm using Corda. Corda is used to create workflows and rules for the dissemination of deal information via the Fusion LenderComm agent portal. Highly secure nodes on the network maintain all transaction history, giving every lender a personal view of deals they participate in and a time-stamped audit trail.
“Syndicated lending is exactly the type of market that will derive huge benefits from DLT,” said R3 CEO David E. Rutter. “Transparency, efficiency and risk are major concerns with current systems and processes. We built Corda specifically to tackle issues such as these, whilst meeting the unique privacy and security requirements of regulated financial institutions.”