LenderComm brings loan servicing on blockchain
Taking blockchain proof of concepts into production is a slow process, but a new loan-servicing platform shows how banks could cut costs and improve service.
Even after years of cost cutting, banks could still be much more efficient if they would only share more utility back-office infrastructure. It’s a simple idea: hard to do in practice.
The chief executive of one leading European bank tells Euromoney: “I believe the way to launch them is in-country, beginning with one partner and then attracting others, rather than by trying to start a shared utility with four or five banks from the outset.”
In May, Finastra – the big provider of next-generation software to financial services firms spanning retail banking, transaction banking, lending, and treasury and capital markets – offered an example of how this might happen.
The company had announced in October that NatWest would be the first bank to integrate its blockchain-based Fusion LenderComm platform to handle all the communication between an agent bank on syndicated loans and the often-large number of lending banks.
LenderComm is a concept that emerged from a Finastra incubator scheme in 2016. It operates on the R3 Corda blockchain platform. In May, three more banks came on to it, all of them French: BNP Paribas, Natixis and Société Générale.