NatWest to roll out blockchain-based syndicated lending platform in November

UK-based bank NatWest has announced that it is going to launch a blockchain-based platform that aims to streamline the global syndicated loans market.

Called “Fusion LenderComm,” the platform has been developed by Finastra in collaboration with BNP Paribas, BNY Mellon, HSBC, ING and State Street. It is underpinned by R3’s Corda platform.

A ‘syndicated loan’ is one which requires a syndicate of two or more lenders to spread the risk. The technology supporting this area of finance is largely outdated and failed to keep up with its pace of evolution – complex syndicated loan deals, which are now common, involve hundreds of lenders.

By leveraging blockchain technology, Fusion LenderComm will revolutionise communication between lenders and agents to assure messages are secure and confidential. According to the press release, the first phase focused on real-time position reporting between lenders, allowing all relevant parties to see their records at any time.

“The syndicated lending industry relies on costly, manually-intensive processes, making it ripe for innovation with blockchain technology. Fusion LenderComm, powered by Corda, has been proven to address these issues. The solution delivers immediate efficiencies and reduces costs for both agent banks and lenders,” David E. Rutter, CEO at R3, said.

Fusion LenderComm aims to reduce the amount of time taken to set-up syndicated loan arrangements for customers, reduce the ongoing cost of administration for lenders, and enhance transparency. It will go live from November 2018.

“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,” Grant Jones, VP, Fusion LenderComm, Finastra said. “This not only brings improved operational efficiency for NatWest and its lenders but it also brings much needed transparency to the syndicated loan market.”