7 Global Banks Partner to Grow Blockchain-Based Syndicated Loan Market

Seven major global banks have in partnership with financial technology (fintech) companies R3 and Finastra for the development of the Blockchain technology-based market for syndicated loans, called Fusion LenderComm. Banks include BNP Paribas, BNY Mellon, State Street and ING.

According to Ian Morris, Head of Product Management, Corporate Loans and Syndicated at Finastra, they have already successfully concluded the first round of pilot testing of the prototype system in August 2017 and plan to conduct more in the future. the coming months.

“More pilots are planned in the coming month. Development sprints continue towards the final goal of going live next year.

Improve data sharing between banks

The Fusion LenderComm platform is designed to improve data sharing activities between agents and lenders, with the ultimate goal of enhancing efficiency and transparency in the syndicated loan market. The system will display real-time credit agreements, position information, accrual balances and detailed transaction data directly to lenders from agent bank loan service platforms like Finastra’s Fusion Banking Loan IQ .

The tamper-proof system will retain the history of all transactions to provide each lender with a personal view of transactions they have participated in and a time-stamped audit record. Among the benefits of the system are reduced operating costs and administrative burden between agent and lender, and access to accurate information to lenders on demand, to maximize loan portfolios.

The platform will be backed by R3’s Blockchain-inspired Corda system and is expected to launch commercially in 2018.

Finastra Deputy Managing Director (CEO), Simon Paris, said the project has already attracted about 10% of the global syndicated loan market, and more players are expected to join in the near future.

“As more and more participants join us, we will quickly gain the critical mass needed to make this the leading market for syndicated loans and loan trading. Lenders will no longer find themselves as an underserved party. of the syndicated loan value chain.Where they have struggled with a lack of transparency and speed to access critical trade positions, Fusion LenderComm is opening up new data plains beyond position reconciliation.

More Blockchain projects with banks

Banks have explored the different use cases of Blockchain technology to improve their operations, especially in the area of ​​lending. For example, IBM has partnered with banks in North America and Europe to digitize some of their crucial processes.

Priscilla C. Carnegie