Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Top Stories

FINASTRA, R3 AND SEVEN LEADING BANKS TO CREATE DISTRIBUTED LEDGER TECHNOLOGY PLATFORM FOR SYNDICATED LENDING COMMUNITY

FINASTRA, R3 AND SEVEN LEADING BANKS TO CREATE DISTRIBUTED LEDGER TECHNOLOGY PLATFORM FOR SYNDICATED LENDING COMMUNITY

BNP Paribas, HSBC and ING among those on board

Fusion LenderComm to deliver transparency into 10% of syndicated loan market from launch

Finastra and seven leading banks are working together to create an online marketplace to drive transparency and efficiency in the syndicated loan market. Underpinned by Corda, R3’s distributed ledger technology (DLT) based platform, Fusion LenderComm exposes real-time credit agreement, accrual balances, position information and detailed transaction data to lenders, directly from agent bank loan servicing platforms such as Finastra’s Fusion Banking Loan IQ.

The move will slash the operational cost and burden of agent to lender administration and deliver self-service capabilities to lenders, providing accurate information on demand to optimize loan portfolios. BNP Paribas, BNY Mellon, HSBC, ING and State Street have joined the global community, with real-time data already exchanged between agents and lenders in the pilot phase.

“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,” said Simon Paris, Deputy CEO, Finastra. “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.”

Ian Morris, Head of Product Management – Corporate & Syndicated Lending at Finastra, added, “The sheer amount of manual effort that goes into information exchange in this market means that quickly accessing deal data, providing transparency into accruals, interest rates and fees, is a real challenge. DLT enables lenders to see a personalized view of positons across agent banks and reduces the operational risk involved in managing multiple participations. From day one, Fusion LenderComm will mean fewer emails and phone calls and an immutable record of transactions during the lifecycle of deals.”

IvarWiersma, Head of Innovation at ING Wholesale Banking, said, “Exchange of information in the syndication lending market is predominantly done manually. This means that accessing deal data, including transparency into accruals and interest rates, can be a time consuming process. The initial focus of Fusion LenderComm is to automate the predominantly manual process of information sharing and to offer better insight in deal data. Further along the line, Fusion LenderComm will ensure a further increase in speed and cost reductions which may lead to smaller participations in syndicated deals and new investment opportunities for our clients.”

Robert Waddell, Global Lead of Syndicated Loan Products for State Street, said, “Fusion LenderComm has the potential to solve a problem whose solution has eluded the loan market since inception: distribution of loan information in a structured, timely, transparent manner that comes directly from the content creators – the agent banks. As a consumer of large amounts of this information, the prospect of eliminating labor-intensive exercises, combined with the additional benefits of increasing efficiency, data accuracy and reducing operational risks, is not only very important for State Street, but all market participants and regulators as well.”

The Fusion LenderComm pilot phase enabled agent banks to publish loan data to the DLT platform, to extend these 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 on the phone or via 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.

Philippe Boulas, Head of Financing Solutions within CIB, BNP Paribas said, “We believe that the distributed ledger is appropriate in syndicated lending to deliver one single position that is immediately updated when a contract is being handled. The Finastra-led utility, Fusion LenderComm, would allow us to share position data more efficiently and pave the way for a more fluid industrialization. This will enable us to innovate our transactions and will support all the participants in the syndication of a structured finance deal.”

Data is securely transferred within Fusion LenderComm using Corda, the financial grade distributed ledger. Using the same technology that powers Blockchain networks, Corda is used to create workflows and rules for the dissemination of deal information via the Fusion LenderComm agent portal. Highly secure nodes on the network maintain all transaction history, giving every lender a personal view of deals they participate in and a time-stamped audit trail.

David E. Rutter, CEO at R3, said, “Syndicated lending is exactly the type of market that will derive huge benefits from DLT. Transparency, efficiency and risk are major concerns with current systems and processes. We built Corda specifically to tackle issues such as these, whilst meeting the unique privacy and security requirements of regulated financial institutions.”

Ellen Hefferan, Senior Vice President of Operations & Accounting  at the Loan Syndications & Trading Association (LSTA), said, “We welcome innovative tools that will help the market settle trades quicker and make information readily available to lenders who need it. A portal and network like Fusion LenderComm that brings more efficiencies to the loan market, and the agent banks that service it, has significant potential.”

The Fusion LenderComm platform is expected to launch next year. It promises an open utility for all banks involved in syndicated lending, including users of Finastra’sFusionBanking Loan IQ and other loan servicing software. The long term roadmap for the platform will transform the whole syndicated loan value chain, from bookrunning to delivering a marketplace for faster loan trading and settlement.

“This latest move by Finastra supports what we’re continuing to see across the syndicated loan market: a growing enthusiasm for tackling longstanding market inefficiencies, with new approaches driven by creative solution-seekers. As a fierce advocate of innovation, it’s an exciting time for us to be a Fintech organization in the capital markets,” said BhavikKatira, CEO at TenDelta LLC.

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post