Finastra Launches Blockchain Solution for Syndicated Lending
Finastra, a London-based financial services software provider, announced on April 24, 2018, the launch of Fusion LenderComm. Fusion LenderComm is an application commercially available on R3’s Corda platform for the syndicated lending market.
According to Finastra’s press release, the Fusion LenderComm app has managed to “streamline information exchange between agent banks and lenders, driving transparency and efficiency in the syndicated loan market.”
The software provider underwent a successful pilot of the program on October 5, 2017, testing the app with global leading banks like HSBC, ING, BNP Paribas, syndicated lenders and enterprise software firm R3.
“The successful completion of the Fusion LenderComm pilot…demonstrates strong momentum towards gaining critical mass for a global marketplace for syndicated lending and loan trading,” said Simon Paris, Deputy CEO at Finastra. “Our continued investment in technologies such as distributed ledger reinforce our commitment to working alongside other innovators, to bring our clients leading-edge solutions that solve their most pressing operational challenges.”
LenderComm Digitizes Communication with Lenders
LenderComm enables financial institutions to act as agents and publish loan data to the blockchain ledger while also extending these self-service capabilities to lenders. Agents can use their own portal to define and publish lender-specific deal position data to the Fusion LenderComm app and drill down into the data without the need to query positions by phone, fax, or email. Fusion LenderComm, therefore, digitizes communication with lenders and drives greater efficiency in the process, eliminating operational risk and saving agents time and money.
There is definitely a real demand to increase efficiency using blockchain technology in the syndicated lending market. Frederic Dalibard, the Head of Digital for Corporate and Investment Banking at Natixis stated that “Fusion LenderComm addresses a key pain point by automating the costly manual processes traditionally involved in such sharing of information. It has been a pleasure to work with Finastra and R3 on this groundbreaking initiative.”
Fusion LenderComm is now available for the financial services institutions. It is a low-cost service alternative which uses Fusion Loan IQ, the industry’s leading syndicated loan servicing platform. The Fusion LenderComm platform is, however, open for any institution involved with syndicated lending.
Large Milestone for Blockchain Technology
“This is an enormous milestone for blockchain,” said David E Rutter, CEO at R3. “As the first CorDapp to go live on Corda, Fusion LenderComm is a true example of how inefficient and time-consuming processes can be transformed through the power of blockchain technology.”
The Fusion LenderCom app can also be linked with other CorDapps, helping increase interoperability between systems and across different business sectors. Furthermore, the highly secure nodes on the Fusion LenderComm network are also powered by Corda. They can also maintain the transaction history of all events which creates immediate operational efficiency for both agent banks and lenders. More importantly, it provides every lender a personal view of the deals they participate in and a time-stamped audit trail.
“Banks are looking for ways to harness new technologies to create greater operational efficiencies, keep costs down and boost profitability,” said Michael Yeo, research manager at IDC Financial Insights. “With its underlying distributed ledger technology, [Fusion LenderComm] has the potential to streamline information exchange in the syndicated loan market, while helping reduce settlement times and create the operational efficiencies banks are looking for.”