A bank in the Middle East

Approving loans in 30 minutes rather than two days with IBM WebSphere business process modeling

Published on 19-Mar-2013

"We measure the results of our efforts so far by the timely release of a new loan share financing product that takes 30 minutes to approve versus two days previously. We’re meeting customer expectations, and that is the aim for the whole bank" - Chief information officer, bank in the Middle East

Customer:
A bank in the Middle East

Industry:
Banking

Solution:
Business Process Management (BPM)

Overview

Founded in 2004, this bank is a joint stock company that adheres to Sharia principles in all its dealings. One of the newest banks in the Middle East, the bank has approximately 230 branches and more than 2,300 employees.

Business need:
This bank faced intense competition. Internal processes were reducing its competitiveness by slowing execution of transactions and development of new products.

Solution:
The bank transformed its loan origination processes using IBM® WebSphere® Lombardi Edition and IBM WebSphere Operational Decision Manager. Also, new business processes make product approvals more efficient.

Benefits:
Now the bank approves loans in 30 minutes, rather than two days, and requires less time to develop a new product. It is competing more effectively, while better meeting customers’ needs.

Case Study

Founded in 2004, this bank is a joint stock company that adheres to Sharia principles in all its dealings. One of the newest banks in the Middle East, the bank has approximately 230 branches and more than 2,300 employees.

The need

As a newcomer to the region’s banking industry, the bank faced intense competition. The bank’s growth was dependent upon offering new products that could be developed and executed quickly. “In order to do a financing, we have to check the credits and go through a number of steps to minimize risks,” says the chief information officer (CIO) at the bank. “We had an old system for loan share financing, an Islamic banking product, built with point-to-point programming. It took two days to process a request for a loan. We had to improve on that.”

The bank aimed to shorten the turnaround time through product innovation, but this introduced additional challenges. In the world of Islamic banking, there are two types of banks. The majority of banks are considered compliant with Sharia, or Islamic law, if they offer a mixture of conventional products with products that are certified by Sharia authority. This bank is entirely Islamic-based. All transactions, contracts and products have to be approved by the Sharia department, where scholars determine whether a new or enhanced product can be certified.

If the Sharia department decides that a product cannot be certified, the product and the code developed to automate it are scrapped, and developers go back to the drawing board. Such delays cost weeks in bringing a product to market.

The solution

“I started to think that business process modeling might help both the businesses and the Sharia department evaluate the product earlier in the development cycle by seeing the whole scenario and how it plays out,” says the CIO. “That is what I proposed to the bank, and it’s what they decided to do.”

The bank deployed IBM WebSphere Lombardi Edition for business process modeling and IBM WebSphere Operational Decision Manager for credit decisions and business rules. The solutions integrate with a service oriented architecture (SOA) that the bank implemented to streamline development processes. The SOA separates applications from their dependencies, using IBM WebSphere MQ as its messaging backbone and IBM WebSphere Message Broker as an enterprise service bus that mediates between front ends, such as trusted partners, and back-end databases.

The CIO’s IT team has transformed loan origination processes across the enterprise, from account opening to auto leasing, using business process modeling. Now they plan to apply business process modeling to the rest of the bank’s business processes. “This is good for the businesses because when we see the process up front, we can make changes at an early stage,” says the CIO. “This helps us work with our Sharia department by enabling us to make modifications before we have committed time and resources to a project. We measure the results of our efforts so far by the timely release of a new loan share financing product that takes 30 minutes to approve versus two days previously. This includes checking with the credit bureau, and it’s all automated, with no human error. We’re meeting customer expectations, and that is the aim for the whole bank.”

The benefit
● Allows the bank process loan approvals in 30 minutes, rather than two days
● Significantly reduces the time required to develop new products
● Enables the bank to meet customer expectations and compete more effectively

For more information

To learn more about IBM WebSphere and IBM WebSphere Operational Decision Manager, please contact your IBM marketing representative or IBM Business Partner, or visit the following websites:
ibm.com/software/websphere
ibm.com/software/decision-management

Products and services used

IBM products and services that were used in this case study.

Software:
WebSphere Lombardi Edition, WebSphere Message Broker, WebSphere MQ

Legal Information

© Copyright IBM Corporation 2013 IBM Corporation Software Group Route 100 Somers, NY 10589 Produced in the United States of America March 2013 IBM, the IBM logo, ibm.com, and WebSphere are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.