NatWest has integrated with a new blockchain-based platform that aims to streamline the global syndicated loans market – worth over £3.5 trillion in loan deals last year.
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, resulting in a loans market that is inefficient, costly to operate and heavily reliant on manual processes.
The Fusion LenderComm platform - due to go live in November - aims to revolutionise communication between lenders and agents using blockchain to ensure 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.
It should reduce the amount of time taken to set-up syndicated loan arrangements for customers - currently complex arrangements can take months to finalise - along with achieving reductions in the ongoing cost of administration for lenders.
Trish Arksey, lending programme director for NatWest, said: “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.”
R3 chief executive David E. Rutter added: “The syndicated lending industry relies on costly, manually-intensive processes, making it ripe for innovation with blockchain technology.”
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