18 Nov 2021

Kafka in the banking/lending industry

kafka technology

The banking and lending industry deals with numerous daily transactions that result in unquantifiable data which need to be used and managed effectively. The generation of big data, characterized by large volumes, sporadicity, and velocity requires adequate tools and techniques to create value. Apache Kafka provides a breakthrough solution for evolutionary data streaming, processing, analysis, and artificial intelligence (AI). This article expands on the value that Kafka creates for financial companies.

What is Kafka technology?

Kafka is an event and data streaming technology platform. The Kafka streaming technology provides real-time data that records events as they occur. The data commit log captured by Kafka is unchangeable but can be used alongside other data. Kafka is an open-source technology, meaning that it can be accessed and modified to suit specific business requirements. It can also be paired with other applications, tools, or plugins to achieve a specific output. Real-time data recorded through Kafka can also be transferred to other applications through a connection and used to create data insights as needed. While the Kafka infrastructure can be built and deployed in-house, it could also be used as a cloud-managed service through a third party.

The Kafka Process

Kafka operates through five major functions: data sourcing, analyzing, processing, connecting, and storing.  First, data is sourced from another application or through the Kafka event streaming feature and grouped into Kafka topics or event groups. Next, this data can be consumed and analyzed based on the topics to create useful insights or further processed into more data topics. Data from Kafka can be stored effectively and also transferred to other applications through Kafka connectors.

How Kafka technology enhances banking and lending processes

Financial institutions are constantly improving their operational processes especially as technology evolves very quickly. Using Kafka is one way that banks can enhance major processes, as well as customer service and engagement. Here are a few ways that Kafka provides value for the banking and lending industry.

Effective Processes: Due to the large volume of data processed from the daily transactions carried out in a financial institution —both offline and online, most banks and lenders process batches of transactions usually in an overnight process to avoid interference with real-time transactions. However, with Kafka, events can be streamed in real-time while data is captured, stored, and processed simultaneously. Banks or lenders no longer have to depend on periodic batch job processes before transmitting and analyzing data. Kafka can also drive process automation; processes can be triggered automatically based on processed data or insights generated in real-time.

Data Analytics and Reporting: Using Kafka as a live-streaming platform promotes real-time data analytics and reporting. Being able to analyze events as they occur helps with making timely and effective decisions, whether this concerns customer satisfaction, security or, process bottlenecks. Kafka allows banks and lenders to tap into the time value of data and thus, creating insights for both effectiveness and operational efficiency.

Customer Engagement: The banking and lending industry predominantly exists to provide financial solutions for customers. With steep competition in the industry, it is paramount for companies to adopt technology that creates a great user experience for customers. With Kafka, financial companies can capture real events that can interpret customers’ actions. For example, events such as opening an account or signing up for a subscription product can be captured into Kafka topics and processed in real-time. This not only benefits the companies who can track and monitor customer sentiments and spending behavior, but it also helps to engage the customers with the right information that may help them to either make a product or service decision or to persuade them to complete a transaction. In essence, quick data capture and analysis leads to quick response time.

Product Pricing: Financial institutions can capture customer sentiments and behavioral patterns that can assist with product pricing. Also, data processed through Kafka can be used to generate insights that help banks and lenders choose the most appropriate prices and rates for their products. This consequently drives profit margin maximization and sometimes, cost savings.

Fraud Detection: The banking industry is susceptible to fraudulent activities and with the Kafka technology, it is more possible to identify suspicious activities in real-time. Event data streaming captures data that can enhance checks and create a more effective approach to fraud detection compared to the delayed batch-processing method of reporting. For example, most banking processes have limits on transaction amounts or failed log-in attempts, Kafka can be used to capture real-time events on these topics and process them for further action.

Compliance and Risk Management: There are a lot of risks associated with the financial industry, failure to take on a proactive approach to managing or preventing risks can be costly for any bank or lender. With Kafka, risks can be easily identifiable promptly through real-time data grouped into specified topics and further analyzed for any compliance issues.


Due to its ability to record and process large volumes of data in real-time, the Kafka technology enhances banking and lending operations. Companies can access insightful information more quickly and make strategic decisions based on the data generated from streamed events. Customer satisfaction in banking and lending is a key success factor, and Kafka provides an effective way to capture data that helps improve banking operations interface and users’ experience. Kafka allows an application integration feature that can be leveraged upon with other machine learning software to generate actionable insights for many financial institutions. It is a ground-breaking technology in financial software that pairs with databases, web platforms, mobile applications, and many enterprise resource planning platforms.

Utina provides an innovative and solution-driven platform that eases the equipment financing and rental process. By employing top industry financial software, the team makes every contract management, pricing procedure, and documentation processing an efficient one for your financing company thus giving you more time to focus on core productive operational activities.

Have more questions on the Utina financial software solution that can set your financing company apart in a fast-growing circular economy? Contact the team through email: hello@utina.io

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