11 June 2021
iLex participated in the panel of the APLMA webinar “Fintech Innovation in Syndicated Loan Markets” held on 11 June 2021. Moderated by Eugene Lau of China Construction Bank and joined by attendees from over 30 market players, the webinar discussed digitalisation in financial services and innovation in the syndicated loan industry.
The webinar opened with a presentation on Digitalisation, which was then followed by a panel discussion on innovative solutions and their future impacts on traditional syndicated lending. The first discussion aimed to pinpoint the areas that will be most impacted by innovation through a poll conducted with the attendees. ‘Distribution’ was voted the process that will benefit most from technology.
“Not only can we expect to run distribution faster and communicate more effectively with digital tools, but we can look forward to better counterparty matching as well. It is better to have 10 bids on a loan than just one, it gives you more choice and allows for best execution.” said iLex’s Founder Bertrand Billon, on the topic.
In a poll conducted with webinar attendees, ‘Better Transparency’ emerged as the top factor for promoting industry liquidity in the next 5 years. Bertrand agreed and commented on the need for platforms to capture and publish anonymized data points to give the market clarity on pricing, in-demand sectors and more.
Drawing references to how US CLOs (Collateralised Loan Obligations) disclose assets which leads to high transparency in the western loan markets, Bertrand added that he is hopeful for APAC’s ability to achieve such levels of transparency as well.
However, panelists noted that transformation of the syndicated loan market is not without roadblocks, requiring time and patience from the market. Bertrand highlighted that to drive higher adoption of innovation, fintech companies need to go beyond having a conceptual solution and showcase, then deliver benefits to the industry. “On top of that, demonstrating volumes is crucial, and volumes mean a bigger pie for all.” he remarked.
Additionally, the adoption of innovative solutions by market leaders is also integral for gaining critical mass and prompting other players to follow.
The webinar concluded with a few key steps that will pave the way for a digital transformation of the institutional lending ecosystem, which was agreed to be collaboration and embracing new solutions. Eugene Lau added that at the individual scale, incorporating fintech into casual discussions will be a good step to bolster literacy and move forward.
“It is great to have APLMA organize an event around innovation” Bertrand Billon said, “It is time for technology to revitalize the syndicated loans space and collaboration amongst all stakeholders in the ecosystem is definitely the way to progress.”