Finastra Takes Blockchain Syndicated-Loan Platform Live04.24.2018 By Rob Daly Editor-at-Large
Finastra’s blockchain-based solution, Fusion LenderComm, is now commercially available, as an app on R3’s Corda platform, for financial institutions operating in the syndicated lending market. The launch was announced today at the LSTA Operations Conference in New York.
Following a pilot, which saw Finastra working closely with some of the world’s leading global banks, syndicated lenders and enterprise software firm R3, the solution is proven to streamline information exchange between agent banks and lenders, driving transparency and efficiency in the syndicated loan market.
“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. Our continued investment in technologies such as distributed ledger reinforces our commitment to working alongside other innovators, to bring our clients leading-edge solutions that solve their most pressing operational challenges.”
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. Fusion LenderComm digitizes communication with lenders – driving efficiencies in the process, saving agents time and money, and eliminating operational risk.
Frédéric Dalibard, Head of Digital for Corporate & Investment Banking at Natixis – one of the banks taking part in the pilot – said, “As a leader in the syndicated loan market, Natixis is always eager to provide a best-in-class customer experience to its clients. By allowing the sharing of syndicated loans position data more efficiently between loan agents and participants, 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 creates immediate operational efficiency for both agent banks and lenders through reduced faxes, emails and phone calls from lenders while creating an immutable record of transactions during the lifecycle of deals. Best of all, agent banks can start publishing select deal information on Fusion LenderComm in a matter of weeks,” said Maynard Ahner, Global Head of Corporate and Syndicated Lending at Finastra.
Powered by Corda, highly secure nodes on the Fusion LenderComm network maintain all transaction history. This gives every lender a personal view of deals they participate in and a time-stamped audit trail.
David E. Rutter, CEO at R3, said, “This is an enormous milestone for blockchain. 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.”
Fusion LenderComm is now available as a low-cost service for financial services institutions acting as agent banks, using Fusion Loan IQ, the industry’s leading syndicated loan servicing platform. However, the Fusion LenderComm platform is an open utility for all institutions involved in syndicated lending, regardless of the loan servicing software in use.
Ellen Hefferan, Executive Vice President of Operations & Accounting at the Loan Syndications & Trading Association (LSTA), said, “We are pleased to see the continued momentum of a solution like Fusion LenderComm. The availability of real-time accurate data, to include not only positions but all servicing events, will bring greater transparency and efficiency to the loan market and facilitate ease of reconciliation. It is a win, not only for the lenders who invest, but also the agent banks who service the loans.”
“Banks are looking for ways to harness new technologies to create greater operational efficiencies, keep costs down and boost profitability. 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,” said Michael Yeo, Research Manager at IDC Financial Insights. “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. Fusion LenderComm is a great example of how blockchain architecture can be used in this way. With its underlying distributed ledger technology, it 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.”
Lenders and agents are invited to get in touch to be part of this exciting initiative: FusionLenderComm@finastra.com or click here to join one of our upcoming product demonstration webinars.
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