SIA, a leading European hi-tech company in payment services and infrastructures owned by CDP Equity, has signed a partnership with WizKey, a fintech company offering innovative solutions for the lending market, to launch an innovative platform for banks, funds and financial operators to trade loans on the blockchain and provide greater liquidity for SMEs.
The initiative aims to create an ecosystem where players in the financial sector can create a transparent, efficient and liquid secondary market for loans: this will make it possible to manage, through SIA’s technological infrastructure, the entire process of trading and granting loans, also as part of NPL (Non-Performing Loans) securitization operations.
According to data from the European Banking Authority (EBA), the nominal value of loans under moratorium as of June 2020 totalled EUR 871 billion. France has the highest level of exposure (EUR 255 billion), followed by Spain (EUR 187 billion) and Italy (EUR 156 billion).
Each of the loan portfolios on the platform has its own permanent data room where the history, documents and all the results of the due diligence activities are available and are recorded using DLT, avoiding the risks of information asymmetry and protecting the parties involved in the process.
Through the use of smart contracts, loans are digitized on the SIA infrastructure, allowing all players in the supply chain to structure competitive private and public auctions and transfer loan portfolios in just a few clicks.
“The creation of an evolved ecosystem for the trading of loans represents one of the first international initiatives based on blockchain, confirming SIA’s constant focus on the development and implementation of innovative solutions for the financial community. The main objective of this project launched together with Wizkey is to support banks in managing loans, especially impaired loans, in a standardized and secure manner, in line with the indications of European regulators”, declared Daniele Savarè, Director of Innovation & Business Solutions at SIA.
“The 2008 financial crisis has already shown us how inefficient management of impaired loans puts the entire country system under stress and can cause serious systemic risks. It is increasingly evident that we need technologically advanced tools to deal with the next wave of NPLs, which is closely linked to the current recession and will manifest itself more strongly in the coming years. The partnership with SIA is a fundamental starting point for promoting a system-wide initiative in favour of all financial operators in the context of Italy’s new digital renaissance. Thanks to an exponential improvement of the technological infrastructure, it is already possible to create a transparent, liquid and efficient secondary market for NPLs to the benefit of the entire country system,” said Marco Pagani, CEO and founder of WizKey.