Major bank reinvents its lending system in the cloud

A large European bank had a long track record of lending to small and medium enterprises (SMEs), but found its competitive position challenged by faster-growing, more technology-centric small entrants. All the while, developments such as strict new capital requirements and a flattening yield curve further eroded the traditional advantages of size. Traditional banking assets, like brand recognition and a large customer base, didn’t provide the speed and ease borrowers were looking for—advantages they were getting from new, smaller banks that used more flexible technology.

The bank had been investing in digital updates to familiar processes. Now it pivoted to aim higher—to position itself at the center of a broad ecosystem of SME services and offer a better customer journey. The first element of this ecosystem would be a renewed commercial lending system that offered the streamlined application process, mobile access, and fast approval decisions that customers wanted. 

To allow for speed and allow the project to “fail forward” the way a nimble FinTech entrant can, the team decided to start at the edge of the organization rather than the core. Because this approach proved the business case quickly and showed customer value, two new teams have branched off from the original to make the transformation more comprehensive: one to integrate similar innovations into the core business, and one to focus on further innovations such as application programming interfaces (APIs) that can drive third-party integrations and new lending products.

This transformation has demonstrated the potential for this bank and other financial institutions to bring similar OpenDATA-driven innovations to other functions such as lending, mortgages, digital payments, compliance, and transaction monitoring. This cloud-based approach can help build increased engineering capabilities that span geography and forge new connections with other industries.