UK Bank NatWest Offers Syndicated Loans with Blockchain Tech
NatWest, a major retail and commercial bank headquartered in the UK, has collaborated with a blockchain operated platform aimed at streamlining the worldwide market for syndicated loans. This lending market in which banks band together to make loans, was noted to be worth £3.5 trillion in 2017.
Another Leap Forward for Blockchain Tech
In other words, syndicated loans are those that require more than one lender to share the overall size and risks associated with a particular loan. More complex loans of this nature often require hundreds of participants, which has increasingly become more common. However, the technology behind this financial sector has been unable to maintain standards, thus significantly effecting the lending market which is relying too much on manual processing and it has been economically costly to maintain operations.
Attempting to offer a solution to this growing industry issue, Fusion Lender Comm, a blockchain platform, plans to utilize emerging technology to revolutionize lender-agent communications and establish a secure platform from which to facilitate operations.
Time Is Money
Built by Finastra and supported by Corda, an R3’ DLT product, the platform will initially focus on position reporting by lenders in real time. This will enable all parties to review records at any given time, as well as offer a road-map from which all details of the lending process can be accessed from the initial deal through to final settlements with all parties.
This will significantly reduce the time required to arrange syndicated loan agreements for clients, which as it stands, may take up to several months to before finalizing. It will also reduce prolonged administration costs directed to lenders.
NatWest’s director of lending programs, Trish Arksey, stated that the UK-based bank plans to invest in emerging technology and work alongside partners and suppliers to offer top quality customer service as well as boost efficiency within a sector that has remained unchanged for twenty years. In this sense, blockchain technology could alter the way this sector functions, opening doors to new opportunities, cutting costs, and saving valuable time for all members involved.