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20.3 - Case Study 3: Banking Loan Application

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Project Objective and Key Requirements

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Teacher
Teacher

Today, we will discuss Case Study 3, which focuses on a Banking Loan Application. The core objective is to build a digital portal that streamlines the personal loan application process. Why do you think digital portals are becoming essential in banking?

Student 1
Student 1

They make it easier for customers to apply without needing to visit a bank.

Teacher
Teacher

Exactly! Now, let's look at the key business requirements. For instance, users must apply with necessary documents. What documents do you think are important for such a process?

Student 2
Student 2

I think they need to provide ID and proof of income.

Teacher
Teacher

"Right! Other requirements include automated eligibility calculations and flagging high-risk applications. The acronym R.E.F. can help remember these requirements:

Student 3
Student 3

That’s a helpful way to remember!

Teacher
Teacher

Great! In summary, understanding these key requirements helps set a solid foundation for project success.

Stakeholders and Their Roles

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Teacher
Teacher

Now that we know the project objectives, let's identify the stakeholders involved in this loan application process. Who can list some stakeholders?

Student 4
Student 4

Customers and loan officers.

Teacher
Teacher

That's correct! We also have the Credit and Risk Team, and Legal & Compliance departments. Why do you think compliance is vital in banking applications?

Student 2
Student 2

To make sure the bank follows laws while processing loans.

Teacher
Teacher

Exactly! Compliance protects both the bank and the customer. Remember: the acronym C.A.L.M. for Compliance - ensure clarity in regulations, alignment with laws, legal stability, and mitigating risks while working with stakeholders.

Student 1
Student 1

This helps remember their roles!

Teacher
Teacher

In summary, recognizing stakeholders ensures that all perspectives are considered during development.

BA Activities

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Teacher
Teacher

Now, let’s dive into the activities Business Analysts must perform in this case study. The first activity is gathering Business Requirement Documents. Why are these important?

Student 3
Student 3

They help define what the system needs to deliver.

Teacher
Teacher

Exactly! They clarify business needs. BAs also create user stories. What’s a user story in your own words?

Student 4
Student 4

It's like a short description of what a user wants to achieve with the system.

Teacher
Teacher

"Correct! Remember the acronym U.S.E.R. for User Stories:

Introduction & Overview

Read a summary of the section's main ideas. Choose from Basic, Medium, or Detailed.

Quick Overview

This section outlines the development of a digital loan application portal, focusing on key business requirements and the role of business analysts in the banking industry.

Standard

The banking loan application case study provides insights into building a streamlined digital portal for personal loans, highlighting essential business requirements, stakeholder involvement, and the critical activities performed by business analysts. It illustrates the importance of risk assessment, compliance, and effective communication between various teams.

Detailed

Case Study 3: Banking Loan Application

This case study covers the design and implementation of a digital loan application portal aimed at improving how individuals apply for and manage personal loans. The project objective is to create an efficient system that allows users to submit loan applications along with relevant identity and income documentation while also ensuring that the application process is compliant with relevant regulations.

Key Business Requirements

  • User Submission: Customers can upload ID and income documents necessary for loan applications.
  • Eligibility Calculation: The system will automatically compute loan eligibility based on predefined rules to facilitate faster processing.
  • Risk Flagging: Applications that are deemed high-risk are flagged for further review by the risk management team.
  • Credit Bureau Integration: The application will integrate with credit bureaus like CIBIL to pull credit scores and details essential for decision-making.
  • Application Tracking: Users can track the status of their loan applications through a designated dashboard.

Stakeholders Involved

  • Customers: Primary users of the loan application portal.
  • Credit & Risk Team: They assess and manage the risk associated with loan applications.
  • Operations Verification Team: Responsible for verifying documents and ensuring compliance with legal standards.
  • Legal & Compliance Team: Ensures that all aspects of the loan application process meet regulatory requirements.
  • Loan Officers: Professionals who review and make decisions regarding loan approvals.

Activities of Business Analysts (BA)

Business Analysts play a key role in this project by:
- Collecting Business Requirement Documents (BRD) and mapping user personas, distinguishing between different types of applicants such as salaried and self-employed individuals.
- Writing user stories detailing the needs and actions of users, alongside defining API integrations with credit bureaus.
- Coordinating and designing various test scenarios to examine fraud checks and ensure compliance with Know Your Customer (KYC) regulations.
- Preparing data mapping required for reports and dashboards that facilitate decision-making.
- Assisting in training customer service representatives on the usage of the new system.

This case emphasizes the importance of understanding industry contexts and regulatory frameworks in designing effective systems.

Audio Book

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Project Objective

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📌 Project Objective
Build a digital loan application portal to streamline the process of applying, verifying, and disbursing personal loans.

Detailed Explanation

The project objective outlines the main goal of creating a digital platform specifically for loan applications. The purpose of this project is to make the loan application process easier and faster for users. This involves automating steps that traditionally require more manual effort, making it accessible online.

Examples & Analogies

Think of applying for a loan like ordering food delivery. Previously, you had to call in your order, wait, and sometimes even fill out a long paper form. Now, with an online system, you can select what you want, customize your order, and see everything in one place—all from your phone. The loan application portal aims to do the same by letting users submit their information effortlessly.

Key Business Requirements

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✅ Key Business Requirements
● Users can apply for a loan with ID and income documents
● System auto-calculates eligibility based on rules
● Risk engine flags high-risk applications
● Integration with credit bureaus (e.g., CIBIL)
● Application tracking via dashboard

Detailed Explanation

This section lists the critical requirements that must be met for the loan application portal to function effectively. It includes user functionalities like applying for a loan, automatic eligibility checks, and systems that identify risky applications. Additionally, connecting with credit bureaus is essential for accessing financial histories, and providing a dashboard for users to track their application status enhances user experience.

Examples & Analogies

Imagine trying to rent a car online. You need to provide your ID and payment information, which the car rental company uses to quickly verify your eligibility based on their rules (like age or driving history). The loan application system works similarly—automatically verifying information to determine if a person qualifies for a loan just as the rental service checks if you're eligible to rent a car.

Stakeholders

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👥 Stakeholders
● Customers
● Credit & Risk Team
● Operations (Verification Team)
● Legal & Compliance
● Loan Officers

Detailed Explanation

Stakeholders are the individuals or groups who have an interest or role in the loan application process and its outcome. Customers are the loan applicants, while the Credit & Risk Team assesses the viability of applicants. The Verification Team performs checks to ensure all information is accurate, while Legal & Compliance ensures that the loan process adheres to regulations. Loan Officers work directly with applicants throughout the loan granting process.

Examples & Analogies

Consider a school play: the students are the ones performing (customers), while the director (loan officer) guides them through practice. The stage manager (verification team) ensures everything runs smoothly, and the costume department (legal and compliance) ensures that everyone is dressed appropriately according to the school's rules. Each of these roles contributes to the overall success of the play, similar to how each stakeholder contributes to the loan application process.

BA Activities

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📊 BA Activities
● Gather BRD and map user personas (Salaried vs Self-Employed)
● Write user stories and define system integrations (APIs with credit bureaus)
● Coordinate test scenarios for fraud checks and KYC compliance
● Prepare data mapping for reports and dashboards
● Assist in training call center on system usage

Detailed Explanation

Business Analysts (BAs) perform several essential activities to ensure the loan application portal meets the stated objectives and requirements. They gather a Business Requirements Document (BRD) to outline the project scope, define different types of users (like salaried individuals and freelancers), draft user stories to capture user needs, and coordinate with various teams to conduct tests, ensuring everything functions correctly, including proper data handling and fraud checks.

Examples & Analogies

Imagine planning a big event, like a wedding. You would start by figuring out what the couple wants (gathering requirements) and understanding their guests (user personas). Next, you'd create a checklist and timelines (user stories) while coordinating with caterers, florists, and entertainers (system integrations). Finally, you would run through a rehearsal to ensure everything goes as planned, resembling how BAs check the loan application system's readiness.

Tools Used

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🛠 Tools Used
● Draw.io (Data Flow Diagrams)
● Confluence (BRD, API documentation)
● JIRA (Requirements and test logging)
● MS Excel (Eligibility criteria modeling)

Detailed Explanation

Various tools are utilized throughout the project to facilitate different activities. Draw.io helps create visual representations of data flow processes, Confluence is used for documentation like the BRD and API details, JIRA assists in tracking requirements and tests, and MS Excel helps model eligibility criteria, enabling the team to manage data effectively and maintain organization across tasks.

Examples & Analogies

Think of these tools like a set of cooking utensils in a kitchen. Each tool serves a specific purpose: you use a knife to chop, a pot to boil, and a blender to mix. Similarly, BAs leverage these tools to organize their processes, create documentation, and keep track of progress, ensuring that every aspect of the loan application is handled efficiently.

Definitions & Key Concepts

Learn essential terms and foundational ideas that form the basis of the topic.

Key Concepts

  • Digital Loan Application: A web-based portal for submitting and managing loan applications.

  • Eligibility Calculation: The process of determining whether an applicant meets predefined criteria for loan approval.

  • Risk Management: Evaluating and mitigating potential risks associated with loan applications.

Examples & Real-Life Applications

See how the concepts apply in real-world scenarios to understand their practical implications.

Examples

  • A digital loan application portal can automate the submission process, allowing users to upload required documents directly.

  • Integrating with credit bureaus allows for real-time checks on an applicant's credit history, aiding in the decision-making process.

Memory Aids

Use mnemonics, acronyms, or visual cues to help remember key information more easily.

🎵 Rhymes Time

  • For loans that you seek, ensure your documents speak; ID and income both need to show, before your application can flow.

📖 Fascinating Stories

  • A customer named Sam wanted a loan. He gathered his ID and pay slips to show his income. Like Sam, every applicant must prepare their documents before hitting 'Submit' on their online application.

🧠 Other Memory Gems

  • Remember the acronym R.E.F. for requirements: Required Documents, Eligibility Checks, Flagging Risks.

🎯 Super Acronyms

C.A.L.M. for Compliance

  • Clarity in regulations
  • Alignment with laws
  • Legal stability
  • Mitigating risks.

Flash Cards

Review key concepts with flashcards.

Glossary of Terms

Review the Definitions for terms.

  • Term: Business Requirement Document (BRD)

    Definition:

    A document that outlines the requirements and expectations for a project from a business perspective.

  • Term: Know Your Customer (KYC)

    Definition:

    A process in financial services used to verify the identity of clients to prevent fraud.

  • Term: Credit Bureau

    Definition:

    An organization that collects and maintains individual credit information.

  • Term: Risk Engine

    Definition:

    A system that assesses the risk levels of applications based on specified criteria.

  • Term: Application Tracking

    Definition:

    A feature that allows users to monitor the status of their loan application throughout the approval process.