BDC Accelerates Loan Processing to Support Entrepreneurs

Highlights

• Founded to make Canada the best place in the world to start a business, BDC aimed to modernize its core to better support entrepreneurs
• Despite over 100 integration points, and a highly mission-critical use case, the Core Lending System was developed alongside the business in just 8 months
• With a new agile way of working successfully adopted, the team continually enhances their lending core, alongside building tools that help Canadian entrepreneurs build more productive, successful businesses

Turning adversity into opportunity, a Canadian bank with the mandate to support entrepreneurship practiced what it preached to its clients and reimagined not only how they develop applications, but how they serve their customers.

The bottom-line narrative at BDC revolves around how a key application enjoyed a very successful rollout, overcoming a stumbling block for the bank that had persisted over the course of several years, racking up expenses but with little to show on the digital front.

But perhaps the more remarkable part of this tale may be how a determined and very different approach—combined with a new toolkit—created a new companywide culture allowing the bank to improve and expand its products and services to help its clients achieve their missions as well as its own. By redefining how they develop new applications, particularly those built on the Mendix platform, the bank reinvented who they are and how they work together, bringing IT into the mainstream of its business in an environment that encouraged teamwork and collaboration.

The result was a staff more dedicated than ever to the bank’s mission and its customers.

The Bank’s Unique Mission

BDC is the only Canadian bank exclusively devoted to entrepreneurs. It provides access to financing, both online and in-person, as well as advisory services to help Canadian businesses grow and succeed. Because of its very specialized clientele, the bank needs to be equally specialized in the services it provides and how those services are delivered.

Underlining BDC’s commitment to support Canadian businesses, Sujatha Venkataraman, a Business Analyst with 16 years of experience at BDC, notes “Unlike other commercial organizations, it has a government mandate to fulfill. BDC is always putting his heart and soul in helping the entrepreneurs out.”

Richard Bakker, a Mendix developer at the bank concurs and exemplifies BDC employees’ commitment to its mission. “That you’re actually helping the people in Canada and the entrepreneurs in Canada—it’s definitely a good thing,” says Bakker. “It gives you goosebumps sometimes.”

BDC serves more than 60,000 clients. The bank, created in 1944 by the Canadian Parliament and originally chartered as the Industrial Development Bank, manages 123 business centers as well as maintaining an online presence. BDC has committed $35 billion in capital to support small and medium-sized businesses.

Given the number of clients and assets under management, it’s understatement to say that the bank does business at a brisk pace and needs to be nimble enough to adapt to change. “I could tell you from my experience, what was there at BDC five years ago and what we have now, there is a drastic change,” says Venkataraman.

Rethinking Development

The transformation of BDC began with the realization that previous attempts to build a lending application did not yield expected results at a pace acceptable to the business. Traditional application development methodologies proved cumbersome and ill-suited to the bank’s goal of building a digital gateway to their lending services that clients could easily use to apply for financial assistance. While the process of building the app became overly complex, the goal remained simple: make it easier and faster for clients to request loans, and accelerate the bank’s ability to process those requests.

Further complicating matters was the need for the new loan app to integrate with several other internal and external applications.

“So, our Canadian businesses need support,” notes Mohsen. “We’re in a global market and part of the mandate of the bank is not only to lend them money but to also help them improve their business through advisory services.”

BDC embarked on a different approach, embracing an Agile methodology that would faster teamwork and a speedier system of getting applications into the hands of users. This new approach represented nothing less than a cultural change for the bank, ushering in processes that were more inclusive and required greater collaboration within IT and across the bank’s internal business units.

The new Agility and Efficiency campaign was welcomed by both staff members and bank customers as an alternative to a system that was process bound, slow and expensive to support.

Meetings and workshops followed to hammer out the basic principles of the new approach. Then, attention turned to finding the right tools to support the revamped development processes. That’s when BDC settled on Mendix as its development platform. The Mendix offering met their requirements—supporting an adaptable, Agile way of working, alongside providing for relatively painless integrations with other internal and external applications.

“So, the biggest transformational impact that Mendix allows us within BDC is to match the language of business, essentially removing the effort that we need to apply to focus on the technology,” says Herman Geldenhuys, a Mendix technical expert at the bank. “Instead, we focus on the language aspect, speaking the same, using the same terms, having a ubiquitous language with the business people. So, we want to get on the same wavelength as them.”

A Successful Partnership

With IT and business units on board, and the Mendix platform fully adopted, BDC shed its traditional IT skin and with universal acceptance of the new methodologies embarked on a series of rapid development and deployment cycles.

About four weeks after implementing development, the bank demoed their initial efforts for its business partners across the country. After that successful rollout, BDC debuted eight major releases of it system over the next eight months, resulting in a fully integrated set of applications with the new CLS—Core Lending System—providing new functionality while meshing with existing applications.

The rate of development and application acceptance was astonishing; it clearly stands as a testament to the eagerness and dedication of IT and other bank staff to remake the process with the help of the Mendix platform.

“So, once we got started with Mendix that was around November 2012,” says Karim Mohsen, product owner of the Core Lending System Modernization project. “Then we were able to get something out within seven to eight months, and we had it in production in June of the following year. So it went pretty fast.”

The need for speed was universally accepted as a base requirement of the new development process. “Most of our clients are small businesses, small and medium businesses, so accelerating our processes, not just helps us, but helps them achieve their goals faster,” notes Dan Covaliu, a BDC developer.

Core Lending Integrated Component System

Today, BDC’s Core Lending Integrated Component System—CLICS—comprises a number of applications that integrate with the showcase Core Lending System. Among the other application are a CRM system built on Microsoft’s Dynamics foundation, a client file system also based on a Microsoft offering (SharePoint) and hooks into external applications such as FICO Blaze Advisor, among other apps.

“From a technical point of view, there’s a lot of integration points and ever-growing until this day,” notes Bakker. With all the required integrations, a lot of data and documents must get passed from app to app.

The numbers bear out the resounding success of BDC-Mendix efforts—

• Application development time was slashed from an anticipated 30 months to just eight months
• The size of the development needed to launch the CLS app was a third of that required for the previous efforts
• Consolidating systems used for legal documentation and approvals have dropped processing time from 25 minutes to 5 minutes across tens of thousands of loans per year
• Loans can now be processed in only 20 – 30 minutes, and in some cases, funds can now be disbursed during the same day a consultant speaks to a business owner

If any of the development staffers needed any additional encouragement or convincing that the new methodology using Mendix was right path, the rapid rollout and enthusiastic response of the bank’s clients did the trick. Today, development continues based on Mendix’s low-code framework. The latest effort is yet another hit among BDC’s entrepreneurial clients. It’s an application entrepreneurs can use to benchmark their productivity against their competitors, used to improve the way they run their businesses.

“Mendix made it quite simple to start to develop rapidly,” says Covaliu. “The ideas come very fast now from inception to fruition.”

Collaboration and teamwork are essential elements of the process. “We’re a good team,” notes Edy Millien, a Mendix developer at the bank, “and we’re discussing every day about how we can improve the software.”

Reflecting on the pre-Agile past, Scrum Master Alice Goret adds: “Being without a team, it’s not the same when you develop because you need other people to challenge you and do the best you can.”

Bold Move Yields Strong Performance for BDC

BDC’s decision to examine its processes and development toolkit help set the bank on its successful course and help it better meet it mandate to Canada’s small businesses. While the initial impetus for this self-inspection was related to the pace of application delivery, the decision to broaden the scope of this introspection beyond IT and application development paid off remarkably.

“We are helping people to do it faster and better with less complicated stuff,” says Goret. “So we’re trying to focus on making it easier for the customer.”

Today, the bank’s staff is more engaged than ever and its ability to introduce new products for its clients is streamlined, efficient and comprehensive. The resolve to change along the willingness to adopt new tools such as the Mendix platform have helped to usher in a new digital age that will underpin the success of BDC’s business, the companies it serves and the bank’s staff.

“Our vision is clearly stated,” says Geldenhuys. “We use that as a guideline to help us decide where value is being added and where it’s not being added. So, things like consulting services, reducing the lifespan of a process, making things simpler, making it easier, making things more accessible, and automating things help us to achieve that mission and that vision that the bank sets out for us.”