The Digital Community for Syndicated Lending, Finastra
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Finastra is a global technology company that provides banking software to over 9,000 clients in more than 130 countries. It generates $2 billion in annual revenue. The company is working on a project called LenderComm that uses blockchain technology to improve the syndicated lending process. LenderComm aims to reduce costs for both lenders and agent banks by digitizing loan servicing and providing a secure platform for sharing deal data in real time. It is currently in a pilot phase with several major banks and plans to expand its offerings over time to include additional parts of the syndicated loan lifecycle such as secondary trading and settlement.
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The Digital Community for Syndicated Lending, Finastra
- 1. Finastra - LenderComm Arvind Vairavan & Zan Zannettou CordaDay Singapore 7 March 2019
- 2. © Finastra | WHO IS FINASTRA? Notes: 1 Subscription adjusted revenue for FY18 | 2 Source: Bureau Van Dijk July 2016 ~130 countries $2bn revenue1 FOOTPRINTPRODUCT AND SERVICE OFFERINGS ~10,700+ employees ~ 9,000 clients • Retail Banking • Transaction Banking • Lending • Treasury & Capital Markets • Payments of the world’s top 100 banks by asset size.2 90 2March 22, 2019 AWARDS AND ACCOLADES Blockchain project of the year Top 10 Innovations of 2018 Digital Banking Award
- 3. © Finastra | Source: Company estimates 175M+ Retail Accounts ~8% of Daily FX Trading >65% of Agented Syndicated Loans of Daily Trade Finance ~12% App in production on R3 Corda $5T Assets Under Management 30% of UK faster Payments 1st CAPITALIZING ON OUR GLOBAL REACH 3 8 / 10 Of the Top Agent Banks Globally
- 4. © Finastra | Source: Company estimates WHAT IS SYNDICATED LENDING? 4 Why Syndications 1. Diversification of risk 2. Part of large projects 3. Low risk instrument • Lenders get information from Agent Bank • Agent Bank is responsible for all communications/notices to Borrower Lender 1 Lender 2 Lender 3 BorrowerAgent Bank
- 5. © Finastra | A MARKET IN NEED OF INNOVATION 5 Challenges LenderComm Platform Lack of tangible business cases or production-ready DLT initiatives >19m faxes sent ever year. Huge operational overhead for Agent Banks Lack of transparent and accessible deal/ position data for Lenders Significant reconciliation errors and lengthy trade settlement periods Lender self- service removes admin-heavy queries for Agents, driving down costs P2P, bi-directional data consumption between Lender and Agent systems Secure, real-time data publishing. Creates a ‘Golden Source’ of truth between Agents and Lenders Production DLT platform, with enterprise-grade security and support
- 6. © Finastra | Reduction in Number of Faxes/Emails sent Ability to increase Agent volumes as fewer staff dedicated to query resolution LENDERCOMM VALUE PROPOSITION: PHASE 1 22 March 2019 6 Digitized Servicing Overview as AGENTS as LENDERS Reduction in Number of Lender queries Real time access to Agent Deal data Lower Administration Costs Share deal data in a secure environment in real time Provides access to an online Lender community Reduction in Operational Risk due to access to data Ability to consume agent data with a decrease in position reconciliation Reduction in the risks associated with the re- keying of data Lower Administration Costs
- 7. © Finastra | ROADMAP TO VISION 7 Optimize the syndicated loan value chain, starting with Digitized servicing March 22, 2019 Book Running Digitized Servicing Secondary Loan Trading Trade Settlement Create Lender Community • A secure and frictionless information exchange portal for agents and lenders, both sell- and buy-side • 9 Pilot Banks – 2 Banks gone “live” on Lendercomm LenderComm Market Place • Aims to be a robust loan trading platform • Publish and discover deals for sale • Currently manual and over the counter • Adoption across Agent and Lender banks (including Non-Loan IQ) LenderComm Trade Settlement • Will eliminate reconciliation leading to significant back office efficiency gains
- 8. © Finastra | 8 AGNOSTIC MARKET COMMUNICATION Publishing and Consumption regardless of source system LenderComm LIQ WSO Core Banking LIQ ACBS [FpML] Lender / Buy SideAgent [Open API] [FpML]
- 9. © Finastra | WHY CORDA? 9March 22, 2019 Enterprise Grade Private Network Firewall Friendly Named Notaries
- 10. © Finastra | LENDERCOMM DEMO
- 11. Thank you CordaDay Singapore 7 March 2019