NatWest Puts Mobile Payments Technology to Work in Lending Platform

October 23, 2018         By: Steven Anderson

We like to think of blockchain operations, and mobile payments, in the smaller, individual consumer sense. We think of paying a few bucks for dinner, or similar activities. But can blockchain be put to work for high-dollar projects? NatWest recently sent word our way showing off how its new Fusion LenderComm platform is helping deliver value in lending that’s so high-dollar that it requires multiple banks to address.

Fusion LenderComm is geared toward the “syndicated loans” market. For those not familiar, syndicated lending is for that branch of lending involving amounts so large that it can’t be handled completely by one bank. Thus, a syndicate of lenders is assembled to address the total and spread out the risk. In some cases—fairly common by some reports—hundreds of lenders can be involved in a syndicated lending operation.

Trying to coordinate hundreds of lenders together, however, can be a challenge by any standard. Communication becomes vital to coordinating said efforts, and given the state of regulation, actually talking about these deals becomes likewise more difficult. That’s where Fusion LenderComm comes in, creating a secure messaging platform by using blockchain technology.

Built by Finastra, and using R3’s distributed ledger technology Corda, the first phase of Fusion LenderComm has focused on “real-time position reporting”, which allows everyone involved in the transaction to see their records at any time. Using Fusion LenderComm should reduce the total time required to set up and finalize syndicated lending arrangements through better and more secure communication.

It may not sound like much, but having a properly secured means to communicate is actually a substantial part of regulatory demand. Having such a tool in place should make it easier to establish these large-scale lending operations and make them available to those who require such efforts. That in turn should improve overall lending on at least some level, provide an improved income stream to the banks thanks to the interest payments such should generate, and make that income stream safer as well thanks to the diversified risk factor.

It’s kind of a surprise to see a mobile payments technology used in such fashion, but here it is. In the end, this just shows us the incredible kind of power that mobile payments technology can generate.