Think of a model in which small and medium-sized business can secure loans at lower rates while lenders can get higher interest rates than the banks offer!  Now think of a model with almost no risks.  Sounds too good to be true?  Think again…

ArchOver is a crowdlending company that has invented a creative model in which both borrowers and lenders are winners!  Gislen Software has developed a software solution which has made this possible.

Background

ArchOver is a peer-to-peer business lending service, connecting businesses requiring finance with lenders seeking a secure and favourable return.  To date, we have facilitated over £35 million in funding for UK businesses and delivered lender returns of up to 8.5% pa, with no borrower defaults, no late payments and no losses.  Our innovative and highly secure approach to P2P business lending offers transparency throughout the financing process for the benefit of both lenders and borrowers.

Lender security is the number one focus.  This is secured by a credit analysis which is one of the most thorough in the sector.  Loans are secured by an all-asset charge over the borrower’s business, registered at Companies House.  For additional security, all borrower revenues flow through controlled bank accounts owned by ArchOver.  This is the only platform which monitors both the asset value and management accounts against forecast on a monthly basis.  We have a zero-tolerance policy for late interest payments or reporting.  ArchOver is a member of the long-established, privately owned Hampden Group.

How it all started

In the early 2000s ArchOver’s CEO, Angus Dent was the finance manager of a client of Gislen Software.  When ArchOver decided to outsource their development, it came naturally to him to ask Gislen Software since his experience of working with us in the past had been good.  While Gislen Software had worked with development for hedge funds in the past, crowd-funding was a new vertical.  Angus Dent visited us in India and spent a week discussing the requirements with two of our Indian analysts.  This provided the initial input for the initial phase.

Requirement and Design

The analysis involved extensive discussions, an ongoing dialogue which continued via email.  Detailed working notes were compiled and these and a product backlog were entered into JIRA (subject and project tracking software).  The screen design used simple wireframes.  We designed classes and relationships and developed high-level documentation of the entire platform.

Development Process

It was agreed that we should use an Agile methodology for software development – a combination of Scrum and Extreme Programming.  This development process consists of several sprints.  Each sprint is a short iteration which involves a self-managed team striving to build fully-tested product increments.  After each iteration, empirical feedback ensures very high quality.  We also conducted an interesting experiment in which we combined our ISO 9000 internal audits with Scrum Retrospective, creating a continuously documented improvement cycle.

For this web application, we have used a Model-View-Controller (MVC) development pattern which is a software architectural pattern for implementing user interfaces.

Since we used an iterative development process, unit tests are used to test the business layer, and automated test scripts test the UI.  This process is maintained consistently to ensure high quality.

Web Application Security

At Gislen Software we make sure that all our web applications adhere to the guidelines laid down in OWASP-10.  This is vital in a financial application and we use code review to ensure that the guidelines are implemented.  For testing at different levels, we have used test-driven development, automatic tests, developer tests and independent testers.  ArchOver’s staff have also tested to ensure that the application meets the highest possible standards.

The Solution

The ArchOver.com platform is a complete solution.  It provides a holistic but very easy-to-use interface for lenders, borrowers and administrators which takes into consideration that some participants may be novices.  The platform follows all regulatory guidelines laid down by the relevant authorities.  Statutory documents like NDAs and collateral documents can be directly uploaded to the website.  All approvals, project status changes are intimated to stakeholders through automatically generated emails.  The application also has an in-depth audit log where every event or change in status is logged.

Conclusion

This solution has been very successful.  A responsible product owner, a well-defined governance process with clear-cut role distribution between ArchOver and Gislen have all been critical to this success.  Gislen Software has so far met every milestone that ArchOver has set, resulting in an application where all stakeholders are pleased.

The first loan was completed in July 2014 and ArchOver has since advanced more than £100M!