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BNP, EY Complete Blockchain Trial for Internal Treasury Operations

BNP Paribas and “Big Four” accounting firm EY have completed a trial aimed to investigate the feasibility of using a private blockchain to improve the bank’s global internal treasury operations.

The blockchain system was put through internal testing by BNP’s ALM Treasury department earlier this summer.

According to a statement, the “successful” trial proved the potential of the private blockchain to drive operational efficiency by providing a more “integrated cash management approach” and allowing “greater flexibility and a 24/7 capability.”

The pilot demonstration reportedly helped BNP Paribas boost the “interoperability of the legacy systems combining the private blockchain with existing IT environment via software robots and APIs.”

According to Xavier Toudoire, the bank’s head of ALM Treasury IT strategy and architecture, private blockchain technology allows the development of different business and operational processes not previously possible due to distribution of data and trust among parties.

“Although it is still too early to determine how the technology will evolve and whether it is suitable for large-scale deployment, our pilot has demonstrated the clear strengths of private blockchain and its potential as one of the most effective ways to improve the existing internal processes between different businesses on an international level,” he said in the statement.

The pilot is the latest in a series of blockchain initiatives by various entities of the bank, including Cash without Borders launched by the bank’s Transaction Banking business.

BNP Paribas image via Shutterstock

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BNP, Tata Tap Blockchain for Event Announcements Platform

BNP Paribas Securities Services has partnered with Indian IT firm Tata Consultancy Services (TCS) on a new pilot that will see the two firms apply blockchain to a new asset servicing data platform.

According to a statement, the companies will launch a blockchain-based platform said to offer faster and more secure corporate event announcements. The ultimate aim of the partnership is to curb inefficiencies and errors that occur via the “cascade” of information that is sent to global clients through various intermediaries.

BNP Paribas will capture and store structured corporate information using TCS’ Quartz blockchain solution, combined with its Swift-certified BaNCS for Corporate Actions platform. The goal is to ensure that the data is “tamper-proof, resistant to node failure and recoverable,” the firms said.

Currently in beta, the platform – called Corporate Event Connect – will collect asset servicing information for corporate actions from over 90 markets, and will use deep learning technology to translate announcements into seven languages.

According to Philippe Ruault, head of digital transformation at BNP Paribas, accurately managing the information on corporate events has long been a “pain-point” for the industry.

“Blockchain is proving to be an extremely useful technology for us, and it is particularly exciting to build a digital ecosystem in cooperation with our clients and partner providers to deliver such a key service,” he said.

The Corporate Event Connect platform is expected to be rolled out in phases, though no timeline was provided for when that process will begin.

Microphone image via Shutterstock

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7 Global Banks Partner Up to Develop Blockchain-based Syndicated Loan Market

Seven major global banks have partnered with financial technology (fintech) firms R3 and Finastra for the development of the Blockchain technology-based marketplace for syndicated loans, called Fusion LenderComm. Among the banks are BNP Paribas, BNY Mellon, State Street, and ING.

According to Finastra head of product management, corporate and syndicated lending, Ian Morris, they already successfully concluded the first set of pilot runs on the prototype system in August 2017, and plan to conduct more in the coming months.

“More pilots are planned in the coming month. Development sprints continue towards the final objective of go-live next year.”

To improve data sharing between banks

The Fusion LenderComm platform is designed to improve the data sharing activities between agents and lenders, with the ultimate goal of bolstering efficiency and transparency in the syndicated loan market. The system will show real-time credit agreements, position information, accrual balances, and detailed transaction data directly to lenders from agent bank loan servicing platforms like Finastra’s Fusion Banking Loan IQ.

The unalterable system will maintain all transaction history to provide each lender a personal view of deals participated in, and a time-stamped audit record. Among the benefits of the system are reduced operational cost and burden of agent-to-lender administration, and access to accurate information to lenders on demand, to maximize loan portfolios.

The platform will be underpinned by R3’s Blockchain-inspired Corda system and is scheduled to be commercially launched in 2018.

Finastra deputy chief executive officer (CEO), Simon Paris, said that the project has already attracted around 10 percent of the global syndicated lending market, with other players expected to join in the near future.

“As more participants join, we will quickly gain the critical mass to develop this into the leading marketplace for syndicated lending and loan trading. No more will lenders find themselves an underserved part of the syndicated loan value chain. Where they have struggled with a lack of transparency and speed in accessing critical deal positions, Fusion LenderComm opens up new data plains beyond position reconciliation.”

More Blockchain projects with banks

Banks have been exploring the various use cases of Blockchain technology to improve their operations, especially in lending. For example, IBM has partnered up with banks in North America and Europe to digitize some of their crucial processes.

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Banks Back Syndicated Loan Market Built on Corda Distributed Ledger

A group of banks and financial technology providers have unveiled a new syndicated loan marketplace built on top of the Corda distributed ledger platform.

The list of banks involved includes BNP Paribas, HSBC, ING, State Street and BNY Mellon, with two other unnamed institutions also taking part in the initiative. Today’s unveiling from Finastra, which was formed by the merger of software firms D+H and Misys earlier this year, follows a previous pilot phase.

The project aims to create a new kind of syndicated loan market, where multiple lenders pool resources in order to fund single debtors. The idea is to use R3’s Corda platform (which saw its 1.0 version released on Tuesday) as a hub for administering loans and sharing key information on things like fees and interest rates in real-time during the lending process.

Philippe Boulas, head of financing solutions for BNP Paribas CIB, said in a statement:

“We believe that the distributed ledger is appropriate in syndicated lending to deliver one single position that is immediately updated when a contract is being handled. The Finastra-led utility, Fusion LenderComm, would allow us to share position data more efficiently and pave the way for a more fluid industrialization.”

The platform, dubbed Fusion LenderComm, already has its own official website, and while its launch date wasn’t disclosed in today’s announcement, the companies behind it are seeking additional backers – particularly lenders who would bring liquidity to the marketplace.

Fusion LenderComm’s unveiling is a notable one, given that the past year has seen a number of banks test applications for syndicated loan markets.

A proof-of-concept platform for issuing syndicated loans, spearheaded this past spring by Credit Suisse, saw participation from a variety of firms, including State Street. Credit Suisse said in August that it is planning a commercial-scale release for sometime next year.

Money image via Shutterstock

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