Blockchain Platform Aims To Streamline Trillion-Dollar Syndicated Loan Biz

Blockchain, Innovation, Investing, News | October 21, 2018 By:

NatWest has become the first bank to integrate with a new blockchain-based platform that aims to transform and streamline the global syndicated loans market.  NatWest serves customers in England, Wales and Western Europe.

In 2017 syndicated loan deals worth over 3.7 trillion USD were brokered globally. The new platform is set to go live next month.

A syndicated loan is where the size and risk of a loan cannot be accepted by a single lender and a ‘syndicate’ of two or more lenders is required to spread the risk. Complex syndicated loan deals involving hundreds of lenders are now common. But the technology supporting this business has been slow to keep up and is outdated. This has resulted in a loans market that is inefficient, costly to operate and heavily reliant on manual processes.

The Fusion LenderComm platform aims to revolutionize communication between lenders and agents using blockchain technology to assure messages are secure and confidential. The platform has been built by Finastra and is underpinned by Corda – R3’s distributed ledger technology. The first phase has focused on real-time position reporting between lenders so all those involved can see their records at any time and there is a roadmap to transform all aspects of syndicated lending from deal set-up and syndicate building through to settlement.

The platform aims to reduce the amount of time taken to set-up syndicated loan arrangements for our customers – currently complex arrangements can take months to finalize. It also aims to achieve significant reductions in the ongoing cost of administration for lenders and a massive improvement in transparency.

Trish Arksey, lending programme director for NatWest, said the company is “excited about the possibilities that this platform offers to transform the syndicated loan market. We are investing in cutting-edge technologies and working with our suppliers and partners to deliver first class customer service and efficiency to a market that has not changed significantly in the last 20 years.”

Grant Jones, VP, Fusion LenderComm, Finastra said NatWest “will now be able to specify and publish lender-specific deal information to Fusion LenderComm in real-time, while its lenders can view this data which was previously only periodically provided by fax from agents or through telephone or email queries from lenders. This not only brings improved operational efficiency for NatWest and its lenders but it also brings much needed transparency to the syndicated loan market.”