LoanXchain accomplished the first pilot transaction
By FF Newsroom · 21 October 2019
Here we are! LoanXchain, the multilateral secondary marketplace for loans in the European market, has successfully executed the first pilot transaction in Le Village by Crédit Agricole, an innovation hub where LoanXchain is a resident start up.
In the first transaction Deutsche Bank and Banca Mediolanum used the platform as buyers and Dynamica Retail as a seller. Salary-backed loans (cessione del quinto) worth 1 million euros were digitized and displayed on the platform to make loan transfer from sellers to buyers simple, fast, transparent and secure.
LoanXchain aims to facilitate originate-and-distribute and originate-to-share models for credit management and to channel non-bank financing to the real economy. The core strengths are:
- granularity and transparency of information. Single loans are managed end to end, from the choice of loans that shall be displayed (i.e., which loans, at what price, to which investors, at what time) to the definition of the purchase proposal (what and at what price). This makes LoanXchain an important ally to manage the impact of the new definition of default (NDOD)
- access to an ecosystem of value-added services for market participants of all dimension, thanks to a state-of-the-art customer experience and to an innovative architecture available at a competitive price
- robust platform language and dataset based on European standards (ESMA) to simplify communication among participants
- traceability and immutability of data thanks to Blockchain/ Distributed Ledger Technology Corda, developed by the R3 consortium. Corda perfectly suits the B2B nature of the platform thanks to its permissioned architecture and its design tailored on financial institutions’ need.
Many financial industry professionals participated in two phases of the event:
- Presentation of the project and execution of the transaction
- Workshop and feedback collection
This important result was achieved thanks to the support of: Deutsche Bank, Dynamica Retail, Mediolanum, Pedersoli Law Firm and R3 (leading software company in the enterprise blockchain segment at the helm of an ecosystem of more than 300 companies, public and private, from different industries).
Angela Gemma, Chief Digital Officer at Deutsche Bank Italy, stressed that LoanXchain facilitates credit disposal and risk sharing, meeting the needs of the post-crisis banking sector and the requirements of transparency, simplification and adoption of new models promoted by the regulator. It supports the optimization of banks' credit and risk warehouse (from originate-to-hold model to originate-and-distribute and originate-to-share models) and supports the development of capital markets with positive impact on the real economy thanks to greater and more stable credit access.
We have been following LoanXchain from its very first steps, says Demetrio Migliorati, Head of Blockchain Program at Banca Mediolanum. We have believed in the model and as innovators and we have appreciated the courage of a "start-up" bringing technology and digitization into a sector that is central for the economy and remains based on legacy system. Thanks to the open source blockchain platform Corda™, which is supported by all major international banks and has been chosen by the Italian banking association (ABI) for the Spunta Bank project, LoanXchain efficiently and securely manages information at the single loan level ensuring data quality and monitoring throughout the loan life cycle. This project confirms Banca Mediolanum effort in developing new technologies for financial services with the goal of making our customers’ lives easier.
Satisfied by the results, Emiliano Rumiz, Director of Information Systems at Dynamica Retail, declares: "We have always positioned ourselves as an innovative company and best performer. We believe that our product quality will be appreciated in the European market. Therefore, we have immediately appreciated LoanXchain’s vision and supported the team in understanding the specificities of salary-backed loans (cessione del quinto).”
David E. Rutter, CEO of R3, commented: "We believe that blockchain-based applications have a great future in the capital market, which is why we have supported LoanXchain since the beginning in 2017. We also believe that LoanXchain, by integrating the capital and credit market, enables a new way of doing business for banks and institutional investors, thus the broader financial services sector. We are proud to continue to support LoanXchain and look forward to applauding other successful operations."
Prestiamoci, one of the first digital social lenders in the Italian market, stresses that LoanXchain offers a truly innovative model for the credit market, aggregating valuable services in one platform for originators and investors in alternative assets. For a peer-to-peer lender like us that stands out for the quality of the credit it originates, LoanXchain provides new rooms for growth and we intend to study it in depth soon.
Jacopo Moschini, Vice-President of the Young Entrepreneurs Group of Assolombarda with delegation to innovation and digital transformation, underlined the project focus on the real economy, the mix of different and complementary skills and, last but not least, the concrete application of the blockchain that led to LoanXchain’s involvement in the Blockchain Steering Committee of Assolombarda.
Le Village by Crédit Agricole Milano, Corso di Porta Romana 16, is a multifunctional space currently residing 28 startups and involving 16 partners and 29 enablers. It is the first Italian Village of Crédit Agricole and the 30th of the international network, developed by the Banking Group in France and Europe.
Le Village by CA Milano aims to select, support and promote startups that operate mainly but not exclusively in seven different areas defined as the "7F": 3 linked to the Italian excellence of the territory (Food , Fashion, Furniture), 3 to sectors related to the CA Group (Fintech/Insurtech, Future Mobility, France) and, lastly, the Pharmaceuticals sector.
Performing LoanXchain's first pilot transaction at Le Village by CA Milano was a fantastic opportunity for LoanXchain to promote the achievement of such an important result. At the same time, it provided Le Village by CA Milano the chance to show its support for resident start-ups, in line with the Banking Group Crédit Agricole business acceleration project to support young companies with high innovative and growth potential in Italy.
Opened in December 2018, the Milanese headquarters - 2,700 square meters inside a former 15th-century convent - houses 200 workstations to work in collaboration or independently. A real ecosystem in which individual parties (startups, corporate partners and enablers) contribute to the growth of the Village, creating a circular economy that finds its definition in the concept "collaborating to innovate."