In case you hadn’t noticed, technology has made huge advances over the last 10 to 15 years. In all that time, however, the commercial loan syndication market has resisted the pressure to digitally transform. Until recently, there’s been enough profit margin to support the heavily manual, labor-intensive processes that still underpin syndicated lending.
But with volumes and distribution activity increasing fast, and banks tightening their belts, loan syndication operations are now rapidly approaching the limit of their resources. The big loan booking data challenge In a highly data-driven market, syndicated lenders and their partners on the buy side must capture and communicate vast amounts of data on the loans being booked. Every syndicated loan, for example, comes with a complex credit agreement – usually a PDF that can run to hundreds of pages and is distributed by email or fax.
The details of this document must be entered not only into the loan agent’s downstream loan accounting system, but also the fund accounting systems of anything from 50 to 300 buy-side funds. Many of the latter aren’t built to manage loans. But even if they were, syndicated loan agreements are far from standardized.
So, with their different ways of talking about pricing, interest, recalls, covenants and so on, the many analog data points can be difficult for automated software to process. Back at the agent bank, there will also be multiple people helping to service each deal – as many as .