White Paper

Modernizing credit processes: cutting-edge solutions for improved financing

In an increasingly competitive credit market, companies need to save costs and lower time-to-cash while preserving risk metrics. Reply is working on innovative end-to-end solutions to support the design of streamlined onboarding and credit origination processes.


A market overview

Given their uncontestable economic impact, the SMEs segment is extremely important: for this reason, financial institutions should be concerned in well addressing one of their essential needs: financing. Financing is key for both companies and financial institutions, but there is still a gap between the demand and supply of credit. There are different reasons for which SMEs financial needs may be left unaddressed.

High costs

Various SMEs complain about too high interest rates, which have further deteriorated in last years According to SAFE report, in 2021, 8% of SMEs agreed that interest rate or commission are too high and 20% of SMEs were faced with a deterioration in the rates by banks.

Lenders strict requirements

In terms of collateral required (lack of owned asset due to the modest size of SME or assets already collateral for other banks) or covenants (adoption of financial covenants/mortgage of buildings that allow banks to influence business decision) which represent important barriers for various SMEs.

Outdated lending process

They are characterized by obsolete credit rating systems, time consuming low-value administrative tasks, heavy bureaucracy and lack of skilled bankers able to guide the SME client towards the most suitable solution to pursue their objectives.

New lending propositions

Unreached by traditional credit offering, many SMEs have started to look at alternative solutions, asking for better and more flexible conditions, faster response time and fully digitalized processes. Heeding the call, a relevant number of new digital players have stepped up in the lending market in the last years, leveraging on on cutting-edge technologies, innovative and light operating/distribution models and less regulated environment. To keep up with the ongoing lending revolution, also financial institutions should consider to revise their credit processes, from a traditional model into an enhanced one.

Traditional model

  • Greater customer support

  • Pricing negotiation

  • Asynchronous process

  • Potentially higher costs

  • Need to meet the customer several times

  • Longer approval time

Enhanced model

  • Reduction of approval time

  • Possibility of subscription 24 h a day

  • Syncrhonous process

  • Digital signature

  • Digitization of documents

  • Streamlined process

Reply’s approach

Reply's approach aims at structuring innovative end-to-end solutions to support the design of streamlined onboarding and credit origination processes. Our expertise covers all the building blocks involved in these processes: from data management to the design of applications, calculation systems and decision engines, both from functional and technological point of view.


Data management

Data management is important to ensure quality of information used in credit evaluations. In this context, the challenge consists in identifying necessary data, selecting data providers, and defining data relationships to enable precise model implementation.


Calculation systems

Internal calculation systems using advanced data analytics, machine learning, and statistical analysis can give lenders an advantage in risk estimation for clients. Output includes rating, fraud index, income model, pricing, and ESG score, used to determine loan proposal's result.


Decision engines

Credit decision engines (CDE) determine if a loan proposal should be accepted or declined by implementing expert-based rules and strategies. CDEs play a central role in credit process by defining compliance with lender's policies and laws.

The technological layer

In order to quickly satisfy new business requirements, Digital Lending Platforms need to be more and more flexible and agile, focusing on a scalable, modular and decoupled architecture. The choice between a «Native», «Cross-platform» or «Hybrid» solution for the front-end bank application is the first challenge to consider. Then, there’s the need to introduce orchestrators: one being able to manage all the aspects related to the UX, defining the steps flow, and another one to manage the process from a business point of view. Finally, regarding core banking, banks can opt for a “cloud-based” or “on-premise” solution: the strategy will depend on the size of the bank and the complexity of the operations and IT systems currently in place.