Federal Home Loan Bank of Chicago: Delivering same-day funding with modern software
At a glance
What we did
- Loan underwriting platform rebuild
- Member eBanking portal modernization
- Solution architecture design
- User research and experience design
- Application development
- Testing automation
- Terraform to provision AWS infrastructure
- AWS Well-Architected Framework
Improving a reliable source of funding
The mission of FHLBank Chicago is to partner with its members in Illinois and Wisconsin to provide them competitively priced funding, a reasonable return on their investment in the Bank, and support for community investment activities. Banks, thrifts, credit unions, insurance companies, and community development financial institutions use the Bank to secure funding for their businesses.
What makes FHLBank Chicago unique is its ability to provide same-day, reliable funding to its members. And it’s no easy feat. In the past it required a lot of manual work. Teams would need to process member requests made over the phone as well as online through FHLBank Chicago’s eBanking portal, then apply a set of business rules to every request, and finally reconcile its loan and cash processing systems at the end of each day, sometimes working to deliver funds late at night.
To make the experience easier for both staff and members, FHLBank Chicago was ready to modernize its loan processing system. The Bank wanted to reduce the amount of manual work that teams were doing, provide members faster access to funding, and enable additional self-service options for requesting funds online. Modernizing its system could also help the Bank reduce time to market new products that further improve its members’ experience.
Taking full advantage of the cloud
The first step was rebuilding its 10-year-old loan underwriting platform. The platform is responsible for receiving, validating, and processing loan requests from hundreds of member institutions to ensure that all loans meet collateral, credit, and capital stock requirements and regulations. The Bank’s original platform, the Automated Advance Approval Process (AAAP), had started to accumulate tangled layers of business logic and extensions added by different teams over the course of a decade. This slowed the Bank down and posed a series of technical challenges including testing complexity and scaling limitations.
When FHLBank Chicago and Slalom partnered to redesign AAAP, we both saw an opportunity to modernize the company’s DevOps tech stack in the process. Operational improvements including the creation of continuous integration and continuous delivery (CI/CD) pipelines could help teams automate testing and other previously laborious tasks.
The platform and the rest of the Bank’s IT infrastructure were already on the Amazon Web Services (AWS) cloud platform, so we leveraged the AWS Well-Architected Framework to help the Bank adopt best practices in a variety of areas. Together, we:
- Optimized application development with .Net Core and Angular.
- Automated testing with SpecFlow and Protractor.
- Implemented infrastructure as code with Terraform, and container orchestration with Docker and Amazon Elastic Container Service (ECS).
Now, with a new underwriting platform called the Member Transaction Approval Process (MTAP) and newly adopted best practices, the Bank can see the benefits of automation for internal teams—including its Member Transaction Desk (MTD)—as well as members.
“The MTD team sees a lot of immediate value from the new automated processes,” says Slalom Solution Owner Catherine Eckbold. “It also benefits members in terms of faster loan processing, faster remediation, and the ability to get their funds faster rather than waiting for the end of the day.”
We’re the only Federal Home Loan Bank that’s 100% on AWS cloud. Leveraging this high-performing technology enables us to enhance the member experience and provide reliable service to support their business needs.
MTAP meets member experience
For members to truly benefit from the dynamic improvements to the Bank’s loan processing system, the Bank needed to translate these improvements on the front end, in the member-facing eBanking portal. Opting for lasting change over temporary stopgaps, FHLBank Chicago decided to use its new tech stack to rewrite and rearchitect key parts of eBanking with Slalom’s help. Our starting point? Expanding opportunities for members to request funds online.
The teams identified which loan types were most common and also most straightforward, then prioritized those as self-service options. This allowed the Bank to strategically start to modernize its front end in a way that would deliver the greatest impact for its customers. Now, 29 products and advance originations (loan requests) are available through eBanking and 85% of advances are originated through the portal. Through the closer integration of eBanking and MTAP, members are also able to track the status of their loan requests as they’re being processed.
Greater visibility for members doesn’t end with request tracking. “With MTAP, we streamlined a lot of processes, improved our security posture, and modernized our infrastructure and architecture,” says Karthik Reddy, Assistant Vice President, Lead Business Systems Analyst, FHLBank Chicago. “We’ve given our members the ability to know exactly what their borrowing capacity is and what their thresholds are at any given point in time. They can log into eBanking, take inventory of their real-time outstanding positions, and make more informed business decisions.”
Holding true to its mission
A week before launch, the teams overcame an unexpected hurdle: collaborating remotely due to COVID-19. Thanks to modern ways of working in the cloud, from any location, Slalom and the Bank safely launched the solution. On the first day of business after launch, FHLBank Chicago completed 60 transactions from initial request all the way to fulfillment—with a combined value of approximately $8 billion.
The Bank brought a new product to market in the early days of the pandemic: a special advance with a 0% interest rate to support qualifying members impacted by COVID-19. On the day of the promotion, hundreds of members took out applications. By the end of that day, you could see hundreds of transactions settled. With a modern system in place that can easily handle new products and process billions of dollars daily, it’s easier than ever for the Bank to hold true to its mission of providing same-day, reliable funding.
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