British bank NatWest has announced a plan for a blockchain-based management system for the syndicated loan market, according to a press release from Thursday. The financial institution plans to launch the new service next month in collaboration with Finastra’s Fusion LenderComm platform, and R3 Corda.
A syndicated loan is a financial instrument that requires two or more lenders to accept the size and risk related to it, and thus creates the so-called ‘syndicate system.’ Syndicated loans totaled £3.5 trillion ($4.5 trillion) last year, according to NatWest, but the existing system is slow and expensive. Therefore, the bank decided to develop a blockchain solution that will streamline the communication between lenders and bank agents.
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