By FintechOS · August 09, 2021
3 minute read

FintechOS Adds Advanced Credit Facility to Core Banking

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The summer ’21 release brings advanced Credit Facility Management to the FintechOS Core Banking product. Credit Facility Management is a key feature for retail, SME, and corporate banks, allowing them to manage multiple credit products under a single credit limit. This update offers immediate benefits to FintechOS customers that work with SMEs, corporates, and high-touch retail clients, reflecting our support for advanced core banking functionality that serves these segments.

The release of Credit Facility Management is part of a FintechOS drive to provide comprehensive core banking capabilities in its Northstar platform.

Credit Facility Management falls within loan and savings administration – the core banking functionality that governs functions such as interest calculations, commissions, collections, and closures over the lifetime of a contract.

A credit facility is a grouping of multiple credit products that a client has arranged with a bank under a single credit limit. Banks can offer companies a credit limit for the company as a whole, and the company can then take on different loan products without the need for separate risk assessments. This simplifies access to funds for companies and greatly reduces time-to-cash. Credit facilities also create operational efficiencies for the bank, because individual loans no longer need separate risk assessments.

FintechOS now offers an advanced solution for the management and facilitation of credit facilities. Some of the key features supported by this release are: 

  • Multiple due dates: Customers can have multiple loans under the credit facility and these loans can have different due dates. Limits for the credit facility are evaluated by automatically taking these due dates into account.
  • Multiple client support: The credit facility can support multiple clients under a single credit facility limit, enabling limits across multiple companies that are part of the same group, or multiple family members who share a credit facility.
  • Automated limit movements: Credit Facility Management enables pre-determined movements in the limit of a credit facility to support the business needs of customers. It could be used to support cash flow at the end of the month, for example, or around seasonal events which require extra funds.
  • Commitment fees: Banks are able to charge a commitment fee for a credit facility that goes unused, in effect giving customers an option on a credit facility.
  • Pre-existing contracts: Credit Facility Management supports the inclusion of existing loans in a credit facility in order to consolidate a customers’ lending under a single limit. This gives banks more flexibility and the ability to better support clients’ businesses.
  • Multi-currency support: Credit Facility Management supports multiple currencies and extends the support for the multi-currency products in FintechOS Core Banking. Limits on multi-currency for credit facilities are evaluated after automated FX conversion.

One of the upcoming features to be supported by Credit Facility Management will be collateral management. This will support multiple collaterals within the context of a single credit facility.

  • Use of the credit facility can be facilitated via an employee portal built using FintechOS which lets employees of the bank directly use all the functionalities. Finally, the Credit Facility Management product can be used through a FintechOS-built employee portal, but it can also be exposed in a headless fashion through APIs if banks want to retain their existing employee-facing interfaces.
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