NatWest will connect to a blockchain platform designed to speed up how lenders and agent banks exchange information in syndicated lending deals. The bank is moving forward with Finastra's Fusion Lende
NatWest will connect to a blockchain platform designed to speed up how lenders and agent banks exchange information in syndicated lending deals. The bank is moving forward with Finastra's Fusion LenderComm, which runs on Corda, R3's blockchain technology. The system goes live in November 2018.
Syndicated loans bring together multiple lenders to fund a single borrower—a corporation, major project, or government. The market is massive: banks processed over £3.5 trillion in deals globally during 2017. Yet the technology behind these transactions has stagnated. Lenders still communicate through faxes, phone calls, and emails. Deals take months to finalize. Manual processes drive up costs.
David E. Rutter, CEO at R3, said "The syndicated lending industry relies on costly, manually-intensive processes, making it ripe for innovation with blockchain technology."
Fusion LenderComm moves loan data onto a shared ledger. Each lender operates a dedicated node. Agent banks broadcast deal information in real time. The system generates an unchangeable record of each transaction throughout a deal's lifecycle.
Finastra created the platform working closely with major banks: BNP Paribas, BNY Mellon, HSBC, ING, and State Street. Grant Jones, vice president of Fusion LenderComm at Finastra, explained that "NatWest will now be able to specify and publish lender-specific deal information to Fusion LenderComm in real-time, while its lenders can view this data which was previously only periodically provided by fax from agents or through telephone or email queries from lenders."
"This not only brings improved operational efficiency for NatWest and its lenders but it also brings much needed transparency to the syndicated loan market," Jones said.
Trish Arksey, director of the lending program at NatWest, spoke to the broader shift. "We are investing in cutting-edge technologies and working with our suppliers and partners to deliver first class customer service and efficiency to a market that has not changed significantly in the last 20 years," she said.
