London-based FinTech firm Finastra has announced that its blockchain platform for syndicated loans is now commercially available as an app on R3’s Corda platform.
The solution, called Fusion LenderComm, was developed in close collaboration with some of the world’s top global banks including BNP Paribas, BNY Mellon, HSBC, ING and State Street. Powered by Corda, the solution reduces the cost and burden of agent-to-lender administration and enables lenders to see accurate information on-demand so they can optimize syndicated loan portfolios.
The solution enables 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 Fusion LenderComm, so individual lenders can drill down into the data without needing to query positions by phone, fax or email, as is typical today. By digitizing communication with lenders, the solution helps save agents’ time and money and eliminates operational risk, thereby enhancing efficiencies in the process.
While the solution is an open utility available to everyone in syndicated lending, Finastra is now making it commercially available as a “low cost service” for firms acting as agent banks using its Fusion Loan HQ system.
“The successful completion of the Fusion LenderComm pilot – which included some of the leading syndicated lenders in the world – demonstrates strong momentum towards gaining critical mass for a global marketplace for syndicated lending and loan trading,” said Simon Paris, Deputy CEO at Finastra. “We’re excited to be able to bring this to the wider market today.
David E. Rutter, CEO at R3, said 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.
“Fusion LenderComm is designed to be fully interoperable with other CorDapps, allowing market participants to achieve further efficiencies and revolutionize the way they operate across different business functions,” said Rutter.
Michael Yeo, Research Manager at IDC Financial Insights, said that the cumbersome methods of sharing information between agents and lenders has been a persistent challenge in the industry but also serves as one of the biggest areas of opportunity.
“IDC sees blockchain as a key tool for allowing banks to streamline their middle and back office operations, especially in areas which were previously manually driven in their process workflow,” said Yeo. “Fusion LenderComm is a great example of how blockchain architecture can be used in this way.”
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