Thanks to a DLT technology based platform, banks, funds and financial operators will be able to securitise and sell credit portfolios thus promoting greater liquidity for SMEs
SIA, a leading European hi-tech company in payment services and infrastructures, controlled by CDP Equity, has signed a partnership agreement with WizKey, a fintech offering advanced solutions for the credit market, to launch an innovative platform available to banks, funds and financial operators to negotiate credits on blockchain and promote greater liquidity to the benefit of SMEs.
The initiative aims to realise an ecosystem where the players in the financial sector can create a transparent, efficient and liquid secondary credit market. This will make it possible to manage, through SIA’s technology infrastructure, the entire credit trading and assignment process, also within the scope of NPL (Non-Performing Loans) securitisation.
According to data provided by the European Banking Authority (EBA), the nominal value of loans under moratorium as of June 2020 totaled €871 billion. France has the highest level of exposure (255 billion euros), followed by Spain (187 billion euros) and Italy (156 billion euros).
Each credit portfolio on the platform has its own permanent data room where the history, the documents and all the results of due diligence activities are available and notarised thanks to DLT technology, avoiding information asymmetry risks and protecting the parties involved in the process.
Through the use of smart contracts, credit is digitised on the SIA infrastructure allowing all players in the supply chain to structure competitive private and public auctions and transfer credit portfolios in just a few clicks.
“The creation of an advanced ecosystem for credit trading represents one of the first initiatives at international level 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 credits, especially non-performing ones, in a standardised and secure manner in line with the indications of European regulators”, said Daniele Savarè, Director of Innovation & Business Solutions at SIA.
“The 2008 financial crisis has already shown us how inefficient management of non-performing loans can put 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 even more vigorously in the coming years. The partnership with SIA is a key starting point to promote a systemic initiative for all financial operators in the context of a new Italian digital renaissance. Thanks to an exponential improvement of the technology infrastructure, it is already possible to create a transparent, liquid and efficient secondary market for NPLs thus benefiting the entire country system”, commented Marco Pagani, CEO and founder of WizKey.