Digitizing Financial Institution Credit Line

Digital transformation stress strikes every institution and department. According to a survey by Gartner, financial services CIOs believe that a greater portion of the business will be originated through the digital channels, and digital initiatives will generate more revenue and value.

Furthermore, the ongoing pandemic has shown us that the digitalization of industries has a great impact on their agility, sustainability, and growth. As the banks and non-bank FIs that had a strong digital infrastructure have risen to the challenge during these difficult times, the ones that didn’t have suffered a lot of losses in terms of profitability, customers, and more.

Therefore, as COVID-19 has changed the world in many ways, the digitalization of banks has become a necessity rather than a preference. Now more than ever, banks need to reset their outdated agenda to meet the needs of customers and design more effective internal processes.

This also applies to financial institution credit line management. Banks need to be able to manage institutional banking credit lines wisely to ensure profitability and keep up with the challenges they face as the manual workload increases, and digitalization seems to be the only way to do so. Read our article to see what the challenges of credit line management are and the best solutions to overcome them to carry FIs to the future.

Credit Line Management 

The full life-cycle management of FI credit is a time-consuming and complex process that forces financial institutions to face many challenges. The involvement of too many departments, high opportunity costs, and the orchestration, which is a huge challenge on its own, are some of the most important examples of what affects the credit pipeline greatly in terms of risk and profitability. However, these challenges can be averted with the deployment of smart technologies and processes.

Manual Limit Check

As banks try to maintain the exposures within its limits (trade, treasury, nostro, etc.) and track them, the manual procedures (e.g. excel) or internal systems that are used, unfortunately, are not adequate. This results in a credit line management prone to human error which brings along many major risks.

On the other hand, a digitized credit pipeline enables real-time limit checks through use of data. That is where our RISQ | financial institutions solution steps in.

RISQ | financial institutions offers a digital platform that enables its customers to track the country and FI limits and efficiently manage the entire life-cycle of a credit line. This solution helps avoid limit breaches, manages risk through various mobile devices with its responsive structure, and allows finding data easily via it’s embedded smart search engine. The automation of these processes enables you to dedicate time and manpower to other areas of credit line management.

Trade Finance

The manual check of counterparty and country limit availability is not only time-consuming, but is also prone to human error such as policy breaches, convenient mismatches, etc., or limit breaches (as lines are not blocked during inquiry) because there is no real-time evaluation and management (limit checker). Moreover, there is no ability to check the status of an ongoing transaction or approval process.

Another challenge is that country limits cannot be viewed in real-time and the fact that there are no online limit reservation capabilities (i.e. blocking line between the inquiry and the actual transaction to happen), which causes overlays and delays.

A study conducted by Deloitte states that internal communications account for half the time a bank spends on a credit application or facility. Meanwhile, the communication with the finance teams on the approval processes is not traceable or recorded which makes the collaboration of trade finance, FI and credit teams harder and more ineffective. Even when you’re dealing with small credit lines or low transaction volumes, communication issues are inevitable.

The fact that all of these processes are carried out manually results in response times being longer which makes the management and procedures of trade finance even more difficult, time-consuming, risky, and non-efficient. However, all of these challenges can be averted with RISQ | financial institutions with its user-friendly UI.

Firstly, the online limit reservation feature (enables branch or customer inquiry reservations) helps avoid limit breaches and manage limits efficiently thanks to real-time limit checks. The reservations can also be checked and updated on RISQ via online API, which enables other applications to do this check in real-time.

It also allows sending exposure/risk openings to RISQ, which allows to efficiently manage the entire life-cycle of a credit line which is free of operational error due to the recapturing of data through integrated AI.

All of these processes can be communicated over a fully digital channel called ‘newsfeed’ which is a secured (and stored) real-time chat linked to a credit application that streamlines cross-department communications and that allows real-time country limit impact.

All of these features not only allow faster response times to client enquiries, but they also provide an automated, time-efficient and risk-reduced credit line management.


Every business seeks profitability. However, manually conducted processes make it hard for the FI department to increase profitability as they cannot manage limits by calculating which transaction will be more profitable and risk-free via excel forms or other internal structures. Therefore, transaction approvals are mostly done based on limit availability rather than profitability.

With RISQ | financial institutions’ integrated RAROC calculator, you can run a real-time profitability check even before limit reservation is submitted, which allows later to make approval decisions based on the profitability.

RISQ is helping banks and other financial institutions to transform the institutional banking business, including managing and digitizing the credit line. With RISQ | financial institutions you can:

Handle 25% more volume with the same staff
Reduce overall approval time by over 50%
Reduce operational errors by 99%

Start managing your credit pipeline with minimized risk and increased profitability today without the time- and labor-consuming excel sheets.