Citizens Bank plans to join syndicated loan platform Versana in the first half of 2024 to expand its credit reach. 

Syndicated loans can range from hundreds of millions of dollars to billions of dollars, and partnering with other banks can help finance deals, Jo Wyper,  head of commercial banking digital and operations at Citizens Bank, told Bank Automation News.

That’s where New York City-based data company Versana comes in.

The company aggregates and normalizes data from its member banks, including Bank of America, Citibank, Credit Suisse, and JPMorgan, to create straight-through processing in the syndicated loan market, Versana Chief Executive Cynthia Sachs told BAN.

As companies were looking to restructure debt, secure working capital or finance acquisitions in 2022, the syndicated loan market swelled to $5 trillion, Agustin Rubini, director analyst of banking and investment services at Gartner, told BAN.

“This is often done to pool risk, especially when the loan amount is large and exceeds the risk appetite of any individual lender,” he said.

Prepping the data

Versana hosts member bank data, including borrowers’ principal and interest payments, which is shared via distributed ledger technology among banks, Sachs told BAN. However, before the data can be distributed, it must be integrated to the platform, she said.

For example, Citi, a founding member of Versana, underwent a material system migration for nearly 10-months prior to connecting its data digitally to Versana. Once a lender subscribes to Versana’s web-based platform, they can use the platform’s APIs to plug into their systems to create straight-through processing. Going live on the platform to be fully onboarded and trained generally takes a few weeks, Sachs explained.

Citizens’ plan 

Citizens expects to move onto the syndicated loan platform in 2024, but first must make sure its data is ready, Wyper told BAN.

“We are working with a small boutique firm that will help us make the necessary changes to one of our loan systems so that we can make the connection into this industry partnership,” she said.

Versana raised $40 million from major financial institutions including Morgan Stanley, Deutsche Bank, U.S. Bank and Wells Fargo in March. Since the platform went live last December, it has completed 1,500 deals totaling more than $900 billion in loans, Sachs said. 

Versana aims to expand its operations to the European Union and the United Kingdom next year, Sachs said.