Tata Infotech
Tata Infotech
Financial Services


Case Studies - Banking Industry Solutions

Case Summary: A leading bank in the US wanted to develop a solution that would automate their loan screening process and enable it to be accessed online.

The Customer: A Fortune 500 Banking Company, US.
Technology: Web Methods and Data Cleansing Tool.

Customer Description

The investigation department of a Fortune 500 bank in the US, which tracks all faulty, bad, and insolvent parties on a day-to-day basis.

The Challenge

The loan officers of this leading bank were dependent on their investigation department for any suspected cases concerning prospective borrowers. The investigation department responded to queries from the loan department via a manual search process, wherein the data searched was made available from multiple sources. This manual process had several limitations in terms of timeliness and completeness of information. The investigation department also lacked a proper system that could search the identity of the borrower in varied name/address formats after mapping with the internal/external data. There was also the added risk of dubious borrowers approaching different subsidiary banks with false identities, thus adding to the bad assets in the organization. The loan department used the investigation department only as a reference point for suspicious parties, as per a manually defined process involving the use of e-mail.

The bank needed an application to drastically reduce exposure from high-risk customers. The internal and external data thus collected by this application was to be utilized by loan approvers online, ensuring quick access, prompt action and increased confidence on sanctions.

The Solution

Tata Infotech designed a system that automated the export and import of data uploads to and from various sources. These sources included both internal and external sources. This process ensured dynamic updates on queries sent to external/internal sources, and a quick response furnished by them about bad prospects.

Today, web methods and data cleansing tools are used for importing the various cleansed-up input files. Various daily, monthly, and periodical input processes are conducted by the system depending on the type of input. The risk score is also calculated by this system. The database thus generates rich, complete, up-to-date data that can be referred to by the loan department for an online background check on borrowers and aid them in arriving at a prompt decision.

Customer Benefits

  • Automated searches from a third party credit information bureau ensure a prompt, enriched search operation for establishing the credentials of any prospective borrower.
  • The external data received via e-mail, CD, or floppy is compiled in the specific format and uploaded to the investigation department for further processing in a fully automated mode.
  • All the loan applications are scrutinized before being approved by the loan officer. This process change was possible only due to the automation at the investigation department.
    o A complete database of the fraud-prone or bad cases is now maintained at the investigation department.
  • Communication within and between the loan and investigation departments is online and dynamic, as against the earlier routine of e-mail. This has ensured the consistency and completeness of internal dialogues, as opposed to the earlier lack of structure and propriety of communication.
  • Early identification of high-risk borrowers is now feasible.
  • Loan officers have increased confidence before approving any prospective borrower, due to the availability of dynamic industry data and a defined credit scoring.
  • Value additions to this system are enormous, as any proactive control over probable bad loans or non-performing assets help to block leakages in the bank's bottom-line.
  • The solution has effected a step in the right direction towards observing the measures laid down in the Basel II guidelines - banks in global markets are seriously attempting to adhere to the indicative deadlines of 2006.