Seven main worldwide banks have collaborated with economic technology companies R3 and Finastra for the improvement of the Blockchain based marketplace for syndicated loans, known as Fusion LenderComm. A number of the banks are BNP Paribas, BNY Mellon, State Street, ING. In line with Finastra head of product control, company and syndicated lending, Ian Morris, they already efficiently concluded the primary set of pilot runs on the prototype system in August 2017, and plan to conduct more within the coming months.
Ian Morris sated:
“More pilots are planned within the coming month. Development sprints continue towards the final goal of go-live subsequent year.”
The Fusion LenderComm platform is designed to enhance the information sharing activities between dealers and creditors, with the last aim of bolstering performance and transparency within the syndicated loan marketplace. The system will display real-time credit agreements, position data, accrual balances, and particular transaction information immediately to creditors from agent bank loan servicing platforms like Finastra’s Fusion Banking loan IQ.
The unalterable system will keep all transaction records to offer every lender a private view of offers participated in, and a time-stamped audit record. A number of the advantages of the system are decreased operational cost and burden of agent-to-lender management, and access to correct data to lenders on demand, to maximize loan portfolios. The platform will be underpinned by R3’s Blockchain-stimulated Corda device and is scheduled to be commercially launched in the subsequent 12 months. Finastra deputy chief executive officer, Simon Paris, mentioned that the venture has already attracted around ten percent of the worldwide syndicated lending marketplace, with different players anticipated to join within the nearest future.
Simon Paris said:
“As more members join, we will fast gain the important mass to develop this into the leading marketplace for syndicated lending and loan buying and selling. No more will lenders find themselves an underserved part of the syndicated loan value chain. In which they’ve struggled with a lack of transparency and speed in accessing important deal positions, Fusion LenderComm opens up new information plains beyond position reconciliation.”
Banks have been exploring the numerous use instances of Blockchain to enhance their operations, particularly in lending. As an example, IBM has collaborated with banks in North America and Europe to digitize a number of their essential processes.