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Understanding this banks usually start simplifying the processes and use more generalised process definition in the “second phase” (”phase of rationalization”). These goals are usually reached, but as a result the system will be nothing more but a “tracking tool” of the lending activity.


Tamas Erni is managing partner of Loxon Solutions, an international leader in providing technology for SME lending and risk management. Tamas has 15+ years of experience in SME risk management and SME financing system implementations.


an innovative scoring system that collects and utilises “traditional” information combined with Big Data sourced information.


2. Process automation and workflow support 3. Continuous Early Warning


Traditional lending systems have failed to serve SME needs. And this failure can be predicted as the “lifecycle” of a traditional lending system used for SME shows the same simple pattern almost always and everywhere.


As the small ticket size requires full automation in phase 1 (the “phase of optimism”) the whole process is built up in the system in a fully automated way. Since SMEs require tailored services and the segment is diversified, the automated process will be extremely complicated to make sure the process covers “all possible cases”. As you already guessed, it will not happen. The complexity grows exponentially, so the process in the end will be extremely complex, and difficult to maintain.


The task of Early Warning is to warn banks in the event of negative changes on both portfolio and customer levels well in advance in order to grant sufficient time for intervention. It helps to maintain the quality of the portfolio. Just like credit scoring and customer rating a proper Early Warning system relies not only on traditional bank internal information but also leverages the digital footprint and other “unconventional” data that is available outside the bank.


Cell HU: +36-70-3169268 Cell UAE: +971-52867-4482 Email: tamas.erni@loxon.eu Web: www.loxon.eu


Loxon is a software company offering integrated lending and risk management software solutions for the financial services industry.


In our opinion the right answer for this challenge is called “smart-automation”. A modern approach able to automate the full process and keep it simple, easy to understand, easy to maintain and easy to execute the same time. The key idea behind this approach is to consider the “exception handling” to be organic and automated part of the process.


This extra layer and dimension of automation over the traditional workflow support, with the help of built in “ownership handling” of internal rules, sub-processes, covenants, product parameters etc. will maximise efficiency. This new age smart-automation is the key to the real “mass customisation” realised in the system.


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