Seven leading banks are teaming up with R3 and Finastra to create a blockchain-based syndicated loan market, LenderComm. This new disruption in the lending market is yet another blockchain application that is going to be used to ease the loan market and serve as a platform for efficiency and up-to-date information.
This new project will decrease the operational costs of the agent to lender administration and will make lenders more independent by providing them with transparency, optimization of loan portfolios and up-to-date information on demand, as reported by Finastra. Some of the partners joining the venture are: ING, HSBC, State Street, BNY Mellon and BNP Paribas.
The CEO of Finastra said:
“No more will lenders find themselves an underserved part of the syndicated loan value chain. Where they have struggled with a lack of transparency and speed in accessing critical deal positions, Fusion LenderComm opens up new data plains beyond position reconciliation. The community of banks already on board covers approximately 10% of the global syndicated lending market and demonstrates the appetite to make this market utility a success. As more participants join, we will quickly gain the critical mass to develop this into the leading marketplace for syndicated lending and loan trading.”
The development of LenderComm is on its way, with more pilots being planned for the upcoming months. The idea is to have a live platform by 2018, the head of product management at Finastra shared. He also mentioned that the more collaboration and joining of new agent banks, the better. As of now, the platform can only be used for viewing, and with further development, it is going to enter an active stage, where the exchange of smart contracts and information between lenders and agents will be possible.
The CEO of Finastra, Simon Paris, shared that the growing interest and the strong collaboration of approximately 10% of the global syndicated lending market shows tremendous “appetite to make this market utility a success”.
The LenderComm project will be made on the grounds of R3’s Corda platform, which is based on the blockchain technology. The company launched Corda version 1.0. R3 has managed to launch a number of projects to keep up with blockchain applications.