Complexities in IT Architecture at Lending Space

The lending market is much bigger than we could probably comprehend. There are various categories of loans, and each has very distinct requirements. Banks and financial institutions have set up their own architecture for lending services – but can they ascertain that they are sorted with the architecture design for loan and credit software and that the architecture is specific to the requirement? It is not just about ensuring system integration; it is a thorough work of confirming system performance and customer satisfaction that is a continuous process.

Banks have complex architectures. They have layers of services and architecture to design, build and manage. This complex architecture makes the process extremely slow, which creates dissatisfaction for many big traditional firms who rely on ageing core architectures for quality services. Banks’ legacy technology is slow to evolve and perhaps will not be cost-effective to replace. Hence, the financial institutions decided to offer a small section of their lending services to the digital lending platform. But where do these digital lending platforms get the information? They must pull the data from the banking lending systems and sometimes from the complex legacy systems. Moreover, the digital lending platforms have their own challenges. 

As per a report in Business Standard, Reserve Bank will be out with the regulatory architecture on the digital lending platform. The reason for this rollout is that the borrowers are extremely dissatisfied with the performance of the digital lending platform. The digital lending business is expanding, but it still has a long way to go before it finally attains its state of technological maturity. Enterprises are using predictive machine learning to implement the scoring model, but for background verification of customers, they must still depend on other third-party agents. Hence, they have not yet achieved the quality of process automation.

Requirement of IT architecture for lending platform

Banks’ lending platforms have layers of services, which makes the lending process extensive and complex. Considering the complexities of the lending platform, banks must build a sustainable system architecture to ensure service fluidity. Banks require a proper IT architecture for lending platforms to offer services to the customers without any issues. It becomes an essential criterion to validate the system functionalityintegration, and performance to ensure that the lending platforms can meet all customer requests.

Let us consider a few scenarios.

  1. There can be multiple customer onboarding at the same time
  2. Customers can enter multiple information at the same time
  3. Multiple loan applications can be processed at the same time
  4. Multiple loans can be approved and disbursed simultaneously
  5. There is a need for multiple updates in the lending platform
  6. The digital platform may have to pull data from banks’ legacy platforms or another mainframe computer

The scenarios mentioned above need the support of an endurable IT architecture. Without an applicable IT architecture, you cannot guarantee the performance, integration, and functionality of lending platforms. It offers ease of use and accessibility for clients to ensure their satisfaction while retaining your customers. The system must perform consistently, and the consistency level is hard to achieve without a sound IT architecture. IT architecture allows you to design a guided workflow and work effectively to strengthen the lending platform performance.

The lending platform is the storehouse of intensive and extensive data that creates an immense load on the system. A proper IT architecture enables banks to generate data on time and reduce the delay in management reporting and data analysis. It reduces the impact of service flow in the long run.

The modern lending platforms are extremely nimble. The features and functionalities keep changing with customer requirements and requests. Running multiple projects without an adequate IT architecture will be cumbersome. Appropriate software architecture can essentially help you achieve the end goals. However, the IT architecture tends to be complex for the complicated lending platform. It must handle the workflow, several actions, repeated requests, task execution, and more. The criticalities in the lending market demand an equally complex IT architecture, which can be made easy by handling it appropriately.

Why is the IT architecture complex for lending platform? IT architecture for Loan Originating Systems (LOS) and Loan Management Systems (LMS)

The lending systems handles many processes flow. We can broadly classify them in seven stages – loan credibility, loan application, loan processing, underwriting process, credit decision, quality check, loan funding.

The organization uses the Loan Originating Systems (LOS) or the Loan software to assess the customers’ creditworthiness. The LOS covers the loan onboarding lifecycle/flow, data entry and verification, the credit assessment, credit approval, sanction letters, declaration letters, AD, welcome letter disbursement and more.

The Loan Management System (LMS) supports entire client lifecycle, loan onboarding, lead management, loan repayment, loan servicing, customer level maintenance, reports, delinquency and NPA processing, collections, credit score factor analysis to mistake correction and repayment strategies.

Both LOS and LMS offer a range of services over a single platform. Alongside offering so many services over a single platform, it is also essential to ensure customer experience and satisfaction and retain them. Customers want to be assured about the system’s performance and functionalities while applying for a loan, purchasing products and services on EMIs, and more.

Managing multiple workflows, massive databases, and customer profiling while ensuring customer satisfaction can make the end-to-end lending process a complex one. It becomes even more tougher without an appropriate IT architecture. An IT architecture must handle the configuration of new loan products, entire loan lifecycle or workflows, fraud prevention mechanism, analysis of data, and more.

Lending systems must capture the information from credit bureaus, accept payments from many service providers, integrate with CRM platforms, accounting systems, collection and credit organizations, and more. It must be able to integrate services from services providers. When enterprises integrate multiple services and some from third-party agents, the IT architecture tends to be more complex.

Lending services are no longer following the traditional process. With a digital platform, lenders are offering direct access to their customers. Financial institutions must address multiple requests of their customers of validating information and data, updating information, uploading documents, accessing messages, and more. All these requests make the IT architecture extremely complex. The main systems must be in connection with the digital lending platform so that whenever customers seek and pull information, the banks’ systems can respond to their requests.

What is the solution? Can testing control the complexities of IT architecture?

Maintaining the system quality can help you deal with the complex IT architecture of the lending platform. A lending platform needs multi-platform and language support. Only the required member should be able to access the lending platforms. It causes less traffic on the website and can control the complexities of IT architecture. 

A lending platform must be integrated with multiple platforms to offer required information to the users. Through integration testing, enterprises can control the complexities of IT architecture. Companies also validate the scalability of the lending platform to ensure that the load is equally distributed. It also checks for the systems’ durability with multiple users using the lending platform simultaneously.

Unauthorized logins can create an uncalculated risk for the website that can intensify the complexities of IT architecture. Security testing ensures that the systems are encrypted for access, the users have role-based access control, and the access criteria of role-based access control are defined.

It is also crucial to test your system flexibility, user-defined fields, custom workflows, and definition of products and services. One of the main criteria of a lending platform is to check if the functionalities must be the same for the open-platform or commercial bank systems. You must also validate the components used in open-platform and commercial bank systems. One of the most important criteria is to check whether we can reuse the custom services and components. Isolating the platform-specific UI code from the main source code line will also help control the complex IT architecture.


We cannot reduce the complexities in IT architecture in the lending space, but we can handle the complex framework of the lending platform. We can control the significant complexities in the lending platforms through the right strategy, distribution, authorization, and access. Organizations must validate their systems frequently to ensure that the system quality is up-to-the-mark. When the IT architecture is already complicated, assuring the system quality will be an added burden, which organizations can ease through thorough end-to-end testing.

Yethi has executed multiple lending projects across more than 22 global countries. Our services include functional and non-functional testing. Our testing experts can provide the most appropriate advice for your lending project to help you achieve the highest ROI on your test implementation projects. Our 5th generation robotic test automation solution, Tenjin, is easy to integrate with all leading lending platforms. It reduces your testing time to 45% and enhances the quality of financial and banking software.