Complexities in IT Architecture at Lending Space

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.

Difference between manual testing and automation testing

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Testing software is important before its launch. Testing an application ensures that it meets the objectives to which it was designed. With the frequency of changes to software increasing, the percentage of tests for “new features” progressively diminishes.  Teams are increasingly spending time to ensure existing features continue to work.  Therefore, the practice of automating tests to reduce the “regression” burden has steadily increased.

What is Manual Testing?

A QA Analyst executes manual testing to detect bugs or defects found in software at the development stage. Software is built with several essential features. A skilled and experienced tester checks all these features, execute test cases and generate reports without the help of any software automation testing tools. This traditional method helps in detecting bugs in software systems. To accomplish the software testing process, it is conducted by the experienced testers.

Benefits of Manual Testing

  • In manual testing, the testers execute test cases manually without any support from tools or scripts. Manual testing allows you to detect the errors.
  • Manual testing allows you to explore a little more possibility. Ad hoc testing allows trying different avenues of detecting errors.
  • Manual testing can eliminate the errors, which automated testing fails to detect.
  • Manual testing is useful when automated testing is not technically possible or is not cost-effective.
  • Manual Testing can help you to detect the issues better, identify the whole problem and fix them.

What is Automation Testing?

Automation allows the testing team to offload some of the test execution efforts to software to execute against a set of pre-determined inputs and validate against expected outputs. Automated testing is a pre-scripted test that runs automatically to help the tester determine whether the behaviour of the application is as expected. Automated testing lowers the run time of repetitive tasks or regression test execution. Automation is an investment that would reduce your efforts over a period of time.  Initially, additional effort and costs are required for procuring the software and creating the test scripts, thereafter it may run automatically with lack or no human effort. 

Benefits of Automation Testing

  • Automation allows the testing team to focus more on “new features” and reduces the repetitive, detailed oriented regression testing.
  • By completing tasks faster, any potential errors can be identified faster to enable faster closure of defects.
  • It reduces business risks by increasing coverage of the tests that you can perform within a given period-of-time. 
  • Ensures increased quality of test results by decreasing the necessity of fixing glitches after release and reduces project costs
  • It increases high test coverage leading to testing more features. Automated test cases can be used multiple times through different approaches
  • Automation allows you to detect software defects at an early stage so that the glitches can be fixed in a cost-effective way
  • Automation allows you to launch the product in the market faster while protecting the potential risks of data manipulation

Despite its benefits, many organizations do not fully implement test automation, either because of the initial cost or the efforts required to maintain the level of automation.   This is a case where the intangible benefits are equally important to the tangible benefits. 

Both manual and automated testing have advantages and disadvantages, and both forms of testing are equally important to get the best results of testing.  It is not a case of one or the other, but a question of using the right tool for the right task.

A few key differentiation are:

  • Manual Testing is done manually by an experienced QA analyst.

Automation Testing is done using scripts, codes, and automation tools by a tester.

  • In the manual testing process, there are possibilities of human errors.

The automation process is code and script-based, hence it is reliable.

  • Manual Testing is time-consuming.

Automation Testing is very fast.

  • Manual Testing is possible without programming knowledge.

Automation Testing needs programming knowledge.

  • Manual Testing allows for random testing.

There is no scope for random testing in the automation process.

What manual testing is best suitable for?  

Ad-hoc Testing: It is an unplanned method of testing. The important factor is the tester’s understanding and insights.

Exploratory Testing: This test is not possible without human skills. A tester must have the knowledge, experience, analytical/logical skills, creativity, and intuition to execute the testing process.

Usability Testing: Human observation is an important factor to measure user-friendliness, efficiency, or the convenience of the software or product for the end-users.

How to think about the complexity of the testing automation?

Application Under Enhancement Cost of automation is relatively low, ROI is moderate.  Reduce cost of automation build. Cost of Automation / Investment is high. ROI is also high. Reduce cost of maintenance.
Application Under Development Cost of automation build is high – repetitive builds. Focus tool on build / change management. Focus on API testing.
  Low Regression Load High Regression Load
Automation Testing Complexities

The differences between these two forms of testing are enlisted below to help you achieve quality output well within your budget and timeline.

Difference Between Manual Testing and Automation Testing

About Yethi:

Yethi has taken the enterprise software testing to the next level with Tenjin’s superior automated test suite. It is powered by an intuitive and path-breaking algorithm that automatically “learns” the software’s UI and “re-learns” any changes without manual assistance. We are led by a team of functional experts, who can conduct testing without relying alone on technical resources. We thrive to help our clients achieve their business objectives within the stipulated time-frame, without compromising on quality. With multiple test case instances, we have proved our technical capabilities.