The blockchain platform, named “Fusion LenderComm,” was built by blockchain consortium R3 and Finastra, a fintech firm. The platform intends to simplify the international syndicated loans market, whose size or level of risk implies that several lenders underwrite them. The underwriters are usually a member of a “syndicate” of two or more financial firms.
Natwest’s decision comes about a year after a pilot of the platform was attempted with contribution from numerous key international banks, including BNY Mellon, BNP Paribas, HSBC and ING. Mondovisione reports that Natwest will unveil the platform in November.
During test phase, Finastra’s deputy CEO Simon Paris stated that the network of banks onboard “covers roughly 10% of the worldwide syndicated lending market,” and that established the market’s “appetite” to turn the blockchain-based market tool “a success.”
Mondovisione further points out that Natwest will utilize the platform’s ability to facilitate “real-time position reporting between lenders.” Furthermore, it will simplify syndicated money lending end-to-end, “from deal set-up and syndicate building through to settlement.”
Finastra has further elaborated that the platform functions by allowing “financial institutions acting as agents to publish loan data to the ledger and extend self-service capabilities to lenders. Through their own portal, agents can define and then publish lender-specific deal position data to [the platform].” This will allow individual money lenders to study the data themselves and not opt to additional phone or online communication to enquire positions.
As per the firm, this system efficiently digitizes communications, reducing costs and minimizing working risks, as well as leveraging blockchain to bring extra security and lucidity to the market. The platform has been commercially accessible as of April this year.
While the ability of blockchain to simplify the international lending market has been recognized long before, Spanish multinational bank Banco Bilbao Vizcaya Argentaria (BBVA) avowed to have become the “first” international bank to carry out a complete loan process using blockchain this April.
Earlier this week, a fintech subsidiary of Thailand’s Siam bank entered into an agreement with Accenture to utilize the R3 Corda-based blockchain platform to improve productivity in supply chains.