SIA, a European payment services and infrastructure company, has signed a partnership agreement with WizKey, a fintech offering advanced solutions for the credit market, to launch a 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 realize 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) securitization.
According to data provided by the European Banking Authority, the nominal value of loans under moratorium as of June 2020 totalled €871 billion. France has the highest level of exposure (€255 billion), followed by Spain (€187 billion) and Italy (€156 billion).
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 notarized thanks to DLT technology, avoiding information asymmetry risks and protecting the parties involved in the process.
Through the use of smart contracts, credit is digitized 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 standardized and secure manner in line with the indications of European regulators”, said Daniele Savarè, director of innovation and 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,” WizKey founder and CEO Marco Pagani said. “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.”
