Mediobanca deploys DLT platform for automated issuance, lifecycle management

Italian bank Mediobanca has partnered with UK software-as-a-service (SaaS) Agora Digital Capital Markets to automate its certificate issuance process using the agoraPlatform, a platform that uses Distributed Ledger Technology (DLT).

The project developed by the two companies will enable Mediobanca to achieve greater operational efficiency and is aimed at facilitating growth in investment certificates, a market in which the Italian bank is one of the leading players with more than 300 issuances per annum.

‘Digitalising issuance workflows is a new achievement for Mediobanca in its technology innovation road map and makes it one of the first movers in the certificates market,’ said Marco Pozzi (pictured), Mediobanca Group chief operating officer.

Mediobanca is seeking to leverage the functionalities of the platform to increase the volume of issuances to ‘satisfy the growing demand from its distributors’.

AgoraPlatform uses smart contracts and DLT in the issuance and life-cycle management of certificates.

The platform has been designed to significantly reduce the time to produce offering documentation for investment certificates issuance which normally requires the compilation of large volumes of repetitive information and is liable to operating errors.

Going forward this information will be automated with manual input only required in the initial phase.

Mediobanca also wants to capitalise on the competitive advantage, especially at a time when distributors are preferring issuers who not only offer competitive prices and efficiency but also an improved time-to-market in drawing up contracts, which is seen as a decisive factor in allocating investment choices in optimal fashion.

‘The adoption of DLT technology also lays the foundation for further automation of the life cycle post-trading, both internally and externally, in an ecosystem that in the future may include central securities depositories and issuing partners,’ said Pozzi.

The infrastructure developed by the UK fintech facilitates ‘seamless interaction between different capital markets units and departments including sales, structuring, negotiation and documentation in a digital environment'.

This enables all issuance documents, including term sheets, final terms and any other ancillary documents, to be drawn up and finalised automatically. Such innovation is enabled by DLT and smart contracts, which facilitate the real-time synchronization of all players, internal and external, involved in the entire issuance process, according to Charlie Berman, co-founder and CEO of Agora.

"As one of the leading players in the international certificate market, Mediobanca benefits from solutions that reduce time to market," a spokesperson for Mediobanca added.

"The agoraPlatform is the world’s first platform to use smart contracts and DLT in the issuance and life-cycle management of certificates, meaning that Mediobanca will achieve greater operational efficiency, increase the volume of issuances, and be able to satisfy the growing demand from distributors. This shows that smart contracts are having an impact on the fixed income market right now and important, meaningful ways," the spokesperson said. 

Following the initial launch of the platform in the summer of 2021 and full implementation, Mediobanca now has over 20 active users of the product and has already completed the first issues through the platform.

The UK fintech appointed Filippo Mattia Ginanni, the former head of cross asset structuring/solutions lead at Mediobanca, in Milan, as its head of structured products and EMTNs, in early 2021.

According to SRP data, Mediobanca was the fourth most active issuer in Italy in 2021 with a 6.9% market share. There are more than 300 live products issued by Mediobanca in Italy with an estimated value of US$3.1 billion.