British Lender Deploys Blockchain To Revolutionize Syndicate Loans Sector
The system is meant to cut costs and enhance efficiency in the sector.
NatWest In Blockchain Partnership With R3
NatWest bank of Britain has revealed that it will leverage blockchain technology to manage loans. The rollout is expected to begin next month. More specifically, blockchain integration will be used to enhance communication between lenders and bank representatives.
NatWest will deploy the Fusion blockchain system that was established by blockchain firm R3 alongside Finastra, a fintech company. Data shows that on the global scale loans worth 3.5 trillion pounds were issued in the past year. According to NatWest, the loan sector has lagged behind, due to use of old technology and it was time institutions took the initiative to introduce more innovative systems. The bank opines that new technology will play a major role in cutting costs and effectiveness due to the elimination of paperwork.
NatWest systems are expected to begin operations in November with the initial focus on reducing time spent between banks and loan customers. As a means of minimizing risks, there will be more than one syndicate of lenders. This will be only applicable in the event that one lender refuses to issue loans due to the high level of risk involved.
R3 is at the moment engaging different sectors to determine how its blockchain system can be used. The firm is working with both manufacturing and healthcare sectors to explore how the system can be integrated to enhance efficiency. With transparency being a major part of the blockchain which R3 has deployed, Corda. Corda is the firm’s open source code system.
David Rutter from R3 said that the syndicate lending sector is known to be costly, with a lot of manual work hence the need for innovation. He pointed out that it is time blockchain technology took over.
Reacting to the partnership, Trish Arksey from NatWest said that they have high expectations that the deal will revolutionize the syndicate loan industry. He pointed out that the firm is still exploring different technologies in its operations through collaborations with different partners. Arksey stated that the end goal was to ensure that customers had the best experience within the market.
Once the blockchain system goes live, clients will have access to lender specific details instantly. They will no longer use traditional faxes from representatives.