Reshaping Syndicated Lending

Cigniti Technologies Blog

Reshaping Syndicated Lending – A DLT Use Case

Blockchain technology (within the broader distributed ledger umbrella) has received a lot of eyeballs over the last decade, moving beyond the admiration of niche cryptocurrency fanatics and into the mainstream conversation of experts and investors, especially in the banking and financial services space.

Whether it is Payments, P&C (Property & casualty) claims to process in Insurance, Trade Finance, or post-trade settlement in Capital markets, there is a myriad of disruptive use cases being piloted collaboratively by big banks and financial institutions across the world.

The global blockchain technology market size is expected to reach USD 1,431.54 billion by 2030, growing at a CAGR of 85.9% from 2022 to 2030, according to a new report by Grand View Research, Inc. As per allied market research, the BFSI share of the pie was valued at $277.1 million in 2018 and is projected to reach $22.46 billion by 2026, growing at a CAGR of 73.8% from 2019 to 2026.

This gives an idea of the monetary potential that Blockchain technology can generate globally.

Challenges: The global syndicated loan business is dependent on archaic back-office operations, administration & paperwork, tax rules and regulations across borders, transparency, and trust issues, and integration challenges between different members of the syndicate.

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Cigniti Technologies Blog The result is a longer settlement duration, high overheads between different parties - banks, borrowers, agencies, regulatory bodies, and high expenses in terms of fees, intermediaries, and documentation charges.

Syndicated lending potential While the syndicated lending market has been slow to join the technological revolution advancing other areas of banking, attitudes across the sector are rapidly catching up with current trends.

A recent Loan Market Association (LMA) study confirms that over sixty percent of surveyed members view fintech as an opportunity to transform critical areas of the syndicated lending process, such as document management and overall operations.

Blockchain technology or its broader DLT umbrella is not a panacea; instead, it should be viewed as one of many technologies that are part of a larger toolbox ((Biometrics Machine learning / predictive analytics Cognitive computing Quantum computing Distributed ledger technology Cloud computing Robotics) that will help in reshaping future financial services infrastructure.

Cigniti Solution: At Cigniti, we gauge the depth of your Blockchain applications and help you derive the best possible ROI from the technology.

With our deep expertise in digital assurance & testing, we use the latest, competitive, and evolving technologies to help you bring efficiency & cost-effectiveness with easy adoption.

Interesting?? Want to learn more, visit- https://www.cigniti.com/blog/syndicated-lending-dlt/

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