Banking at the Speed of Retail: Revolutionizing Credit Acquisition

In an era where the free market is becoming increasingly dynamic and consumer-oriented, a prominent Ukrainian bank has embarked on a groundbreaking initiative to expand its personal loan portfolio. By implementing an innovative approach that puts consumers directly in the decision-making process – in retail outlets – the bank not only harnesses the flexibility of the free market but also revolutionizes the loan application process. This strategic move has streamlined credit access, making it more responsive to modern market demands and marking significant progress in banking sector automation. As a result of this initiative, the bank has ascended to the top position in Ukraine regarding its loan portfolio and active customer base. To gain insights into this technological leap, we contacted Roman Saltanov, the program’s data architect, author, and developer, who continues to ensure the swift processing of personal loan applications and the automation of credit agreements within the bank’s core systems.

Automation Workflow

Pioneering Retail Credit in a Nascent Credit Card Landscape

At the time of the bank’s strategic shift, the credit card market was in its early stages of development, with the concept of credit cards being relatively new and unfamiliar to many customers. Rather than facing the daunting traditional credit application process, consumers were presented with an innovative retail credit solution. This approach provided a more accessible and customer-centric option for financing, aligning with the bank’s goal to develop the retail lending sector in the absence of widespread credit card usage. It allowed customers to swiftly choose their products and complete the credit process on the spot, accelerating the path from selection to purchase.

Quantifying the Impact

The impact of this initiative was profound. Post-implementation, the bank witnessed an explosive growth in consumer credits, with a more than tenfold increase. During the active phase of the project, which spanned several years, the bank not only achieved its goal of expanding its credit portfolio but also significantly grew its customer base and diversified its product offerings. Retail partners experienced a considerable increase in sales, with an average issuance of approximately 5,000 credits per day.

The Automation Workflow

At the heart of the bank’s substantial growth in the retail credit sector was an automated processing system that commenced with a bank operator generating a credit application at the retail point. This application was immediately received by the application processing server, marking the first step in a streamlined credit journey.

The application was then forwarded to the credit center server, where a series of automated client checks were performed using a sophisticated scoring system designed to evaluate the client’s eligibility for credit accurately. This scoring system utilized a range of criteria to ensure a fair and thorough assessment.

Should the scoring system indicate the need for further investigation, the application was reviewed by a credit center operator. This step allowed for deeper scrutiny, ensuring that all factors were considered before deciding on credit issuance.

Once the review was complete, the decision was conveyed back to the retail point. In the event of approval, the bank operator prints the credit documents for the client and confirms the credit approval to the retail outlet, facilitating the immediate purchase of goods on credit.

Following the credit approval, the retail operator confirmed the issuance of goods, which activated the bank’s system to create the credit transaction automatically. This system was responsible for executing all the necessary steps to ensure the transaction was processed correctly, culminating in a payment to the retail network.

This entire process, from application submission to the decision and transaction creation, was remarkably swift—taking just a few minutes, a testament to the advanced automation in place.

The Results of Streamlining

The efficiency of this automated system was not just in its rapid processing but also in its near-instantaneous decision-making capability, reducing the time from application to decision to a mere few minutes. This efficiency extended beyond the initial credit application to include the creation of the credit agreement in the bank’s system and the processing payment to the retail network.

Expansion and Future Outlook

The automated credit application system subsequently expanded its scope to encompass a wider range of credit products, including auto loans and mortgages. It was successfully implemented across the bank’s international branches, bolstering its revenue streams. This strategic move underscored the transformative potential of automation in streamlining banking operations and enhancing customer engagement and service quality. Furthermore, this process demonstrates the potential for universal replication across various markets. It is particularly beneficial for countries with expansive territories or geographically dispersed regions, such as African nations or island archipelagos like the Philippines and Indonesia. This system allows banks to achieve cost savings and expand their reach into new markets. The Philippines, in particular, presents a promising and largely untapped opportunity for such expansion.