Lending Platform with Credit Risk Assessment
A risk management tool for a lending platform
Banking and finance
React, Redux, Redux-Saga, Recharts, MaterialUI, Final-Form
2 front-end developers
Our client, a large European bank, was looking to facilitate their lending and investment management departments’ operations. To achieve that, they wanted to integrate a web application that would allow both clients and bank employees to calculate an individual customer assessment, credit portfolio, and loan risks.
They contacted OTR to develop a risk management platform to be integrated with their web banking application to allow their clients to get their risk score calculated and apply for a loan without visiting a physical bank office. The solution should provide a single view of customers’ debit and credit funds, payments, receivables, and investments.
Solution: Description and Key Capabilities
Our team created and seamlessly integrated a new feature — a risk assessment questionnaire and reporting tool. It helped collect personal information, build each client’s investment portfolio, and monitor their income and expenses. When the client answered every question, the bank would assign them a risk score. Bank employees took it into account when approving loans. The solution offered the following features:
- Multi-page questionnaire to determine clients’ risk score
- Customer due diligence and risk assessment
- Definition of a risk profile (Conservative, Balanced, Dynamic)
- Customized reporting & analysis
- Live notifications on forms filled for bank employees
First, we reviewed our client’s requirements and defined the critical project stages. We began development by determining how to efficiently organize the loan and investment risk assessment to make the process user-friendly and the solution easy-to-navigate. Our team chose the Agile methodology to give us more flexibility and stay within the project’s timeline.
The developers selected React and Redux as our technology stack as they had already proved efficient for creating similar complex web applications. The web app included two parts: several questionnaire pages and a report view screen. The questionnaire pages provided users with an interface to insert their data in the corresponding fields. The system then transmitted the info to the bank professionals, where approvers could review and approve loan and investment applications.
The Report View screen displayed the generated file details, such as loan structure and investment portfolio, recommended portfolio structure, and more. The application offered recommended minimum rates, yet users could override them with their figures and forward them for an approver’s review. We used Recharts to display all calculations as interactive charts and graphs to improve the info perception. The reports could be both viewed online and downloaded.
The risk management web application is now used by bank consultants to calculate loan risks and individual client’s investment risk factors. It has already proved a valuable tool for customer onboarding as it saves clients’ time and lets bank clients get their risk scores assessed without traveling to the bank office.
The loan management software helps manage clients, process loan and investment applications online, automatically route the filled-in forms to the bank’s employee for further review and notify them as soon as there’s a new application in the system. Bank clients can view detailed charts and see how their risk scores and recommended loan portfolios change from month to month. They can browse cash flow reports and profit/loss statements and instantly see their financial performance (including repayments, loan terms, loan schedule, collateral, files, fees, grace periods) through graphic charts and make better-informed decisions.
All in all, this system application has allowed the Bank to become significantly more approachable to online users. The solution is instantly available online to all the bank’s clients, resulting in a significant increase in the number of loan applications. And the automated risk scoring system has freed up banking employees from manual risk assessment activities resulting in a higher application processing throughput.