End-to-End Retail Lending Workflow
Lending
Retail Lending
Guided Sandbox

Note: To use our Retail Banking Lending APIs with the Temenos Cloud Banking Sandbox, you will need credentials and a custom endpoint. To get started Register Your Interest


This guide takes you through the end-to-end process within a retail lending environment.
It covers the common types of workflows that banks either integrate into their own application and functionalities, or 3rd party applications, using our APIs.
The guide is broken down into eight sections:
 

  • Lending Dashboard
  • Loan Creation
  • Disbursement
  • Change Interest
  • Increase Commitment
  • Payment Holiday
  • Repayment
  • Payoff
     

Note: You can view our APIs in the API Reference Tables


Lending Dashboard

The Lending Dashboard shows the types of applications you can build using Transact APIs.
It offers an overview screen that a loan officers call the "start of the day" view. This includes all the relevant actions and data points they would need to manage the bank's lending portfolio.


Client Activities:
A list of customer activities and their status is placed as the focal point. Upon clicking on each customer request, the user is navigated to the page where lending services are performed.


Request Status:
A request status graph, to the right of the dashboard in the example app, shows the current status of customer requests within the lending process


Loan Portfolio Additions:
A chart that details a product-wise count of additions to the bank’s loan portfolio has been added to help track recent additions to the loan portfolio for three different periods:

  • Past 7 days
  • Past 15 days
  • Past 30 days


Loans Maturing within 7 days:
All loans maturing in the next 7 days are displayed below the client activities, allowing users to track and contact customers regarding their maturing loans.

Loan Creation

Loan creation is the activity of creating a loan account for a customer.
To create a loan account, the loan officer enters essential details about the loan, including:

  • Customer for whom the loan is created.
  • Loan product
  • Loan start date
  • Loan amount
  • Loan term
  • Repayment frequency
  • Disbursement account-the account the loan funds are distributed to- and the account from which loan repayments are automatically debit.

View the Loan Creation APIs here.



Disbursement

Disbursement is the process of transferring a portion or the entire commitment
(commitment = total loan amount) from the loan account to the borrower.

Banks / Financial Institutions might put the disbursement activity on hold until certain administrative actions from the customer’s end are completed, or the bank’s policies might require a bank user to initiate disbursement manually instead of automatic disbursement. Upon a customer’s request/completion of a credit assessment, technical appraisal and/or loan documentation at the bank’s end, the user can disburse the agreed amount to the account specified by the customer.

This flow applies to these scenarios:

  • When a customer asks for the loan amount to be disbursed.
  • When a bank user initiates disbursement.

View the Disbursement APIs here.

Change Interest Rates

The Change Interest Rates feature in Transact enables borrowers to choose from an interest rate type of their choice within the loan product framework, it is configured according to pre-defined/agreed-upon business logic.
This flow applies to a customer request for a change in Interest rate type from fixed to floating/vice-versa and margin application/changes on the loan interest rate.

Interest rates charged by a bank depend on several macro-economic factors and the types of interest rates vary from bank to bank.

The elastic interest defining feature of Transact enables banks to define an interest rate type coupled with a single tier or with multiple tiers, bands margins, etc. offering an inherent price difference between interest rate types.

Increase Commitment

This flow applies to a request received from the customer to increase the loan commitment.
The Increase Commitment feature of Transact allows the bank user to increase the loan commitment along with the revised payment schedule to be shared with the customer.

Commitment for a loan account can be defined while creating a loan contract. However, there could be situations when banks receive requests from customers to increase the loan commitment due to higher demands for credit.
To do this, the bank user needs an option to increase the loan commitment amount.

View the Increase Commitment APIs here.

Payment Holiday

This flow applies to a request for a loan repayment holiday that is mandated as restraint on a loan due to COVID legislation or another similar need.
Due to regulatory needs, client convenience and extraordinary circumstances like COVID, banks may want to provide flexibility to their customers by allowing a delay to regular loan repayments.
Such as where the customer opts for a payment holiday for ‘n’ number of months or weeks, according to the repayment schedule, repayments are recalculated and the revised payment schedule is available for the customer immediately.

View the Payment Holiday APIs here.

Repayment

This demonstrated flow applies to a request for a loan repayment that is initiated by the customer as part of a regular business scenario.
The instinctual repayment feature of Transact recognizes and assigns the repayment amount to balances due and yet to be due, based on the repayment date and amount. When a payment is received before the due date, the solution appropriates the balance towards the principal outstanding balance.
Repayment is the activity of paying back money borrowed from a bank as per the agreed schedule. Typically, a repayment happens through monthly periodic payment, consisting of both principal and interest components.
Similarly, for overpayment, the principal balances are reduced and when the payment amount is less than the amount due, penal interest is charged on unsettled balances.

View the Repayment APIs here.

Loan Payoff

The Loan Payoff feature in Transact is configured to perform complete repayment of the debit balance in the loan account, settle outstanding bills (if any) and move the account status to pending closure. Payoff can be auto settled from the customer account.
A customer might want to settle their loan by paying off the entire sum of the loan before its maturity date. In the event of a payoff, the principal amount borrowed, interest, and charges (if any) accumulated, is settled in a single payment.

View the Repayment APIs here

 

API Reference Tables
Loan Creation APIs

Request Type

API Type

API

Description

 

 

 

Get

Loan Creation

Accounts

Retrieves the customer’s savings and current accounts.

Loan Creation

CustomerName

Retrieves customer details for the given customer ID.

Loan Creation

ConsumerLoanProducts

Retrieves the list of loan products for a loan product group/family.

Loan Creation

ProductInterestInfo

Retrieves the principal and penalty interest for the loan product.


Post

Loan Creation

ConsumerLoan

Creates a consumer loan for the chosen loan product.

Disbursement APIs

Request Type

API

Description

 

 

 

Get

Accounts

Retrieves the customer’s savings and current accounts.

ArrangementBalances

Retrieves the commitment details for the loan.

SettlementDetails

Retrieves the payin and payout settlement account details of the loan arrangement.

PayOutBeneficiary

Retrieves the list of all beneficiaries of the consumer loan.



Post

AddBeneficiary

Creates a new beneficiary of the consumer loan.

LoanDisubursment

Allows to create Payment Order instruction for the transaction amount on a loan arrangement.

Commitment APIs

Request Type

API

Description


Get

Arrangement Balance

Retrieves the commitment details for the loan.

 




Put

Decrease Commitment

Decreases the commitment amount against any un-drawn principal of the loan.

 

Increase Commitment

Increase the commitment amount by providing a topup amount.

 

Payment Holiday APIs

Request Type

API

Description


Get

Payment Schedule

Retrieves the repayment schedule for the consumer loan.

Loan Details

Retrieves details about the consumer loan.


Post

Simulate Payment Holiday

Simulates the Payment Holiday schedule.


Put

Payment Holiday

Confirms the Payment Holiday for the consumer loan.

Repayments APIs

Request Type

API

Description



Get

BillsDetails

Retrieves information about the outstanding bill.

SettlementDetails

Retrieves the payin and payout settlement account details of the loan arrangement.


Post

LoanRepayment

Create Payment Order instruction for the transaction amount on a loan arrangement.

Payoff APIs

Request Type

API

Description



Get

BillsDetails

Retrieves information about the outstanding bill.

SettlementDetails

Retrieves the payin and payout settlement account details of the loan arrangement.


Put

Sim Loan Payoff

Simulates pay off for the entire sum of the loan.


Post

PayOff

Allows to create Payment Order instruction for the transaction amount on a loan arrangement.