Major financial institutions have participated in the successful demonstration of the first working blockchain solution for syndicated loan servicing that was exclusively developed by Synaps Loans, a joint venture of Ipreo and Symbiont.
Credit Suisse helped in arranging the blockchain project and R3’s lab and research canter helped in managing the proof-of-concept testing for the system.
The blockchain demonstration saw participation from nineteen firms including Barclays, BBVA, Danske Bank, LSTA, Royal Bank of Scotland, Scotiabank, Societe Generale, State Street Corporation, Wells Fargo, among other key banks, service providers and fund managers.
“Synaps now has the majority of the functionality needed to implement blockchain technology at scale in the syndicated loan market, which enables us to move into the final stages of development. Over the coming months, we will work with Symbiont and Ipreo to implement the remaining functions to allow for distributed ledger technology to support a syndicated loan facility from origination to payoff and work toward market adoption. The technical and market expertise that the project participants brought to the table means this solution will be tailor-made for use in live transactions,” Emmanuel Aidoo, head of the blockchain effort at Credit Suisse, stated.
Synaps works by combining Symbiont's leading smart contract technology and Ipreo's new business process solution in order to help speed loan trade settlement. The company enables loan investors to have direct access to the authoritative system of record for syndicated loan data. This system of records brings immediate savings by reducing manual reviews, data re-entry, and systems reconciliation.
The blockchain demonstration was influential buy-side firms AllianceBernstein (AB), Eaton Vance Management, KKR, and Oak Hill Advisors, who were also involved in the initiative.
“The project participants provided invaluable subject matter expertise from a wide range of perspectives: agent, dealer, fund manager, and custodian/trustee. This enabled us to design a system that delivers value for the entire loan market,” Joseph Salerno, MD of Loan Trade Settlement at Ipreo and CEO of Synaps Loans, said.
