How the Syndicated Loan Industry Is Finally Getting Automated

While technology has transformed many areas of finance, one corner that’s remained relatively untouched — at least until recently — is the opaque world of syndicated loans. That’s because most deals involve hundreds of pages of bespoke agreements that can be hard to automate. But as annual issuance in the global loan market reached $5 trillion by 2022, almost doubling from 2010, and as compliance rules get tougher, the pressure for digitization has grown and opportunities for new “fintech” platforms have opened up.

Back in the 1980s and 1990s, banks used an array of manually driven processes to share information with other lenders when they formed a group to provide financing to companies for investment, expansion or acquisitions. Syndication desks mainly used platforms such as Debtdomain in Europe and Asia, and Intralinks and SyndTrak in the US, for posting primary market deal information, conducting bookrunning and issuing invitation letters. Lenders would then print out materials to review. Once deals closed, data from the agreements were typed into servicing systems and disseminated via fax or later email.