Loan App with Microservices And Azure Cloud

Loan Application System – Architecture, Strategy, Blueprint, and Risk Register

📌 Business Vision

Enable a fully digital, paperless, and automated loan application and disbursement process to reduce time-to-approve from 7 days to under 2 hours, increase customer satisfaction by 40%, and ensure 100% compliance with SEBI and RBI regulations.

🎯 Business Strategy

• Customer-centric digital loan experience

• Reduce manual intervention through automation

• Ensure scalability, security, and auditability

• Enable real-time integrations with external agencies (e.g., CIBIL, eMandate)

• Support regional deployment for compliance and low-latency performance

 Technology Strategy Aligned with Business Goals

Business Goal	Technology Enabler	KPI
Faster Loan Processing	Automated loan evaluation with Java microservices, AKS	Average loan processing time < 10 minutes
Regulatory Compliance (RBI/SEBI)	Azure Policy, Key Vault, Compliance Automation	Compliance rate > 98%
Fraud Detection	Real-time Kafka stream processing, ML model scoring	Fraud detection rate > 90%
Scalability & Availability	AKS for container orchestration, Azure Front Door, CDN	Uptime > 99.99%, Transaction throughput > 10k/s
Cost Efficiency	Azure Spot VMs, Autoscaling, Serverless Functions	Cloud cost reduction > 15%

• Low Latency: Use Azure Front Door + CDN + AKS for regional proximity

• Security First: Azure AD, NSG, WAF, Firewall, Istio mTLS

• Observability: Prometheus, Grafana, ELK

• Compliance: Encryption-at-rest, Azure Policy, audit trails

• High Availability: Azure Load Balancer + Active-Active AKS

• Scalability: Horizontal pod autoscaling in AKS

📈 Business Outcomes and KPIs

KPI	Target
Application-to-Approval Time	< 2 hours
Platform Uptime	> 99.9%
Fraud Detection Accuracy	> 95%
Deployment Frequency (CI/CD)	3+ times/week
Mean Time to Detect (MTTD)	< 5 mins
Mean Time to Recover (MTTR)	< 30 mins
Compliance Violations	0 tolerance

🏛️ Enterprise Architecture

Capabilities

1. Customer Onboarding

2. KYC Verification

3. Credit Score Check

4. Loan Evaluation

5. Agreement Management

6. Loan Disbursement

7. Notification & Alerts

8. Fraud Detection

9. Reporting & Analytics

10. Audit & Compliance

Capability to Service Map

Capability	Microservice
Customer Onboarding	onboarding-service
KYC Verification	kyc-service
Credit Score Check	credit-score-service
Loan Evaluation	loan-evaluation-service
Agreement Management	agreement-service
Loan Disbursement	disbursement-service
Notification & Alerts	notification-service
Fraud Detection	fraud-detection-service
Reporting & Analytics	analytics-service
Audit & Compliance	audit-service

Capability to Tech Map

Microservice	Tech Stack
All services	Java + Spring Boot
API Gateway	Azure API Management, Istio
Database	Azure SQL, Cosmos DB
Messaging	Azure Kafka
CI/CD	Azure DevOps, GitHub Actions
Monitoring	ELK, Prometheus, Grafana
Identity	Azure Active Directory (AAD)
Container Orchestration	Azure Kubernetes Service (AKS)

⚙️ High-Level Architecture Components

1. Frontend (Angular/React) hosted via Azure CDN

2. API Gateway (Azure API Management + Istio)

3. Microservices Layer deployed on AKS

4. Database Layer

   • Azure SQL (structured data)

   • Azure Cosmos DB (NoSQL/unstructured data)

5. Message Bus: Azure Event Hub or Kafka on Azure

6. Security Layer: Azure AD, NSG, WAF, Azure Firewall

7. Monitoring/Logging: ELK, Prometheus, Grafana

8. Automation: Azure DevOps Pipelines

9. External Integrations: CIBIL, eMandate APIs

10. Compliance & Audit: Azure Policy, audit-service

    
    

    High-Level Architecture Components (Azure)

    • Frontend:

      • React Web App / Mobile App hosted on Azure Static Web Apps.

    • API Gateway:

      • Azure API Management (API Gateway) + Azure Front Door for global load balancing.

    • Service Layer:

      • Java Spring Boot microservices running on Azure Kubernetes Service (AKS).

    • Data Layer:

      • Azure SQL for transactional data (loan applications, customer details).

      • Azure Cosmos DB for NoSQL data (e.g., application status, logs).

      • Azure Blob Storage for document storage (e.g., loan agreements).

    • Messaging:

      • Apache Kafka on Azure for event streaming.

    • Security:

      • Azure AD for identity management and OAuth2 for authorization.

      • Azure Firewall, WAF, and Network Security Groups (NSG) for network security.

    • Monitoring & Logging:

      • ELK stack (Elasticsearch, Logstash, Kibana) for centralized logging.

      • Prometheus + Grafana for real-time application monitoring.

    • DevOps:

      • Azure DevOps for CI/CD pipeline with Terraform/Bicep for infrastructure as code.

      • Containerized microservices deployed on Azure Kubernetes Service (AKS).

    • AI/ML:

      • Azure Machine Learning for scoring and loan risk prediction.

    • Compliance & Governance:

      • Azure Policy for enforcing governance, Key Vault for secure secrets management.

    
    

    High-Level Use Case Flows & Events

    🔁 1. LoanApplicationSubmitted

    Topic: loan-application-submittedProduced by: LoanApplicationServiceData Stored:

json

{

"applicationId": "APP123456",

"customerId": "CUST98765",

"loanType": "Home Loan",

"loanAmount": 1500000,

"tenureMonths": 120,

"submissionTimestamp": "2025-05-04T12:30:00Z",

"channel": "Mobile",

"status": "SUBMITTED"

}

🔍 2. KYCCheckCompleted

Topic: kyc-check-completedProduced by: KYCServiceData Stored:

json

{

"applicationId": "APP123456",

"customerId": "CUST98765",

"kycStatus": "VERIFIED",

"kycSource": "Aadhaar+PAN",

"kycTimestamp": "2025-05-04T12:31:30Z"

}

📊 3. CreditScoreEvaluated

Topic: credit-score-evaluatedProduced by: CreditScoreServiceData Stored:

json

{

"applicationId": "APP123456",

"customerId": "CUST98765",

"creditScore": 750,

"creditAgency": "CIBIL",

"scoreEvaluationTimestamp": "2025-05-04T12:32:00Z"

}

🧠 4. LoanDecisioned

Topic: loan-decisionedProduced by: LoanEvaluatorServiceData Stored:

json

{

"applicationId": "APP123456",

"decision": "APPROVED", // REJECTED or REVIEW_REQUIRED

"autoDecision": true,

"reasons": [],

"evaluatorEngine": "RulesV2",

"decisionTimestamp": "2025-05-04T12:32:45Z"

}

🧑‍⚖️ 5. LoanDecisionFinalized (if manual review was required)

Topic: loan-decision-finalizedProduced by: ManualReviewServiceData Stored:

json

{

"applicationId": "APP123456",

"decision": "REJECTED",

"reviewerId": "USER0012",

"comments": "Insufficient income proof",

"reviewTimestamp": "2025-05-04T13:10:00Z"

}

✍️ 6. LoanAgreementSigned

Topic: loan-agreement-signedProduced by: LoanAgreementServiceData Stored:

json

{

"applicationId": "APP123456",

"customerId": "CUST98765",

"signedVia": "eMandate + eSign",

"signingTimestamp": "2025-05-04T13:15:30Z",

"signatureStatus": "SUCCESS"

}

💸 7. LoanDisbursed

Topic: loan-disbursedProduced by: LoanDisbursementServiceData Stored:

json

CopyEdit

{ "applicationId": "APP123456", "customerId": "CUST98765", "disbursedAmount": 1500000, "bankTxnId": "TXN98761234", "disbursementDate": "2025-05-04T13:20:00Z", "notificationSent": true }

🔒 Cross-Cutting: AuditService

• Each event includes standard headers:

json

{

"applicationId": "APP123456",

"customerId": "CUST98765",

"disbursedAmount": 1500000,

"bankTxnId": "TXN98761234",

"disbursementDate": "2025-05-04T13:20:00Z",

"notificationSent": true

}

 Cross-Cutting: AuditService

• Each event includes standard headers:

json

{

"eventId": "UUID",

"eventType": "LoanDisbursed",

"source": "LoanDisbursementService",

"timestamp": "2025-05-04T13:20:01Z",

"correlationId": "CORR-APP123456"

}

1. 
   

    End-to-End Architecture Text Flow (Use Case: Digital Loan Processing)

   🔹 1. Loan Application Submission

   Frontend (Web/Mobile) →Azure Front Door → WAF → Azure Application Gateway → Azure Load Balancer →LoanApplicationService (in Azure AKS)

   Flow:

   • User fills out the loan form and submits.

   • Request is routed via Front Door (global entry point), passes WAF for threat inspection.

   • App Gateway applies routing rules, forwards to Load Balancer.

   • LB sends traffic to LoanApplicationService pod in AKS (Istio mesh manages traffic internally).

   • Service validates input, generates Loan Application ID, stores it in Azure SQL.

   • Event LoanApplicationSubmitted published to Kafka.

   🔹 2. KYC Verification

   KYCService (AKS) subscribes to LoanApplicationSubmitted from Kafka.

   Flow:

   • Fetches user data and invokes external KYC APIs (e.g., Aadhaar, PAN) via Azure API Management.

   • KYC result is persisted to Azure Cosmos DB.

   • Event KYCCheckCompleted published to Kafka.

   🔹 3. Credit Score Check

   CreditScoreService (AKS) listens to KYCCheckCompleted.

   Flow:

   • Sends request to CIBIL API for credit score.

   • Parses, evaluates, stores score in Azure SQL.

   • Publishes event CreditScoreEvaluated to Kafka.

   🔹 4. Loan Evaluation and Approval

   LoanEvaluatorService (AKS) listens to CreditScoreEvaluated.

   Flow:

   • Reads application + KYC + credit score from DB.

   • Applies business rules:

     • Auto-Approve: strong score + income → event LoanApproved

     • Auto-Reject: poor profile → event LoanRejected

     • Borderline: publish REVIEW_REQUIRED → send to ManualReviewService queue

   🔹 5. Manual Review (if required)

   ManualReviewService (AKS) consumes from Azure Queue Storage.

   Flow:

   • Underwriter accesses UI (RBAC via Azure AD), reviews application.

   • On action, updates final decision → publishes LoanDecisionFinalized.

   🔹 6. Loan Agreement Signing

   LoanAgreementService (AKS) listens to LoanApproved event.

   Flow:

   • Triggers e-Sign or e-Mandate API (e.g., Digio or NSDL).

   • Once signing is successful, stores document metadata in Azure Blob Storage, status in DB.

   • Publishes LoanAgreementSigned.

   🔹 7. Loan Disbursement

   LoanDisbursementService (AKS) listens to LoanAgreementSigned.

   Flow:

   • Calls Core Banking APIs to trigger disbursement.

   • Updates ledger in Azure SQL, logs transaction.

   • Sends SMS/email notification (via Azure Communication Services).

   • Publishes LoanDisbursed.

   ☁️ Infrastructure-Level Flow (Azure Cloud)

pgsql

User → Azure CDN → Azure Front Door → WAF → App Gateway → Load Balancer

→ Azure AKS (Istio mesh) → Microservices (Java)

→ Kafka → Azure SQL / Cosmos DB / Blob / Queue Storage

→ External APIs (KYC, Credit Score, eSign)

→ Azure Monitor + ELK + Prometheus + Grafana

→ Azure DevOps CI/CD Pipelines

→ Azure AD (RBAC for UI + APIs)

→ Secure via NSG + Firewall + WAF + Private/Public Subnets in VNet

Here is the text-based architecture flow for the Loan Application System, showing all microservices, events, Kafka topics, and consumers in a step-by-step format. This simulates an architecture diagram using a structured textual layout.

🏗️ Text Version: End-to-End Architecture Flow with Microservices, Events, Kafka Topics & Consumers

1. Loan Application Submission

• Microservice: LoanApplicationService

• Trigger: Customer submits loan application

• Action:

  • Validates data

  • Generates Application ID

  • Stores in DB

• Event Published: LoanApplicationSubmitted

• Kafka Topic: loan-application-submitted

• Consumers:

  • KYCService

  • AuditService

2. KYC Verification

• Microservice: KYCService

• Trigger: Consumes from loan-application-submitted

• Action:

  • Calls Aadhaar, PAN APIs

  • Stores KYC results

• Event Published: KYCCheckCompleted

• Kafka Topic: kyc-check-completed

• Consumers:

  • CreditScoreService

  • AuditService

3. Credit Score Check (e.g., CIBIL)

• Microservice: CreditScoreService

• Trigger: Consumes from kyc-check-completed

• Action:

  • Calls CIBIL API

  • Stores credit score

• Event Published: CreditScoreEvaluated

• Kafka Topic: credit-score-evaluated

• Consumers:

  • LoanEvaluatorService

  • AuditService

4. Loan Evaluation & Auto Decisioning

• Microservice: LoanEvaluatorService

• Trigger: Consumes from credit-score-evaluated

• Action:

  • Applies rule engine

  • Routes to:

    • Auto Approve

    • Auto Reject

    • Manual Review

• Event Published: LoanDecisioned

• Kafka Topic: loan-decisioned

• Consumers:

  • ManualReviewService (for REVIEW_REQUIRED)

  • LoanAgreementService (for APPROVED)

  • AuditService

5. Manual Review

• Microservice: ManualReviewService

• Trigger: Consumes from loan-decisioned where status = REVIEW_REQUIRED

• Action:

  • Assign to underwriter queue

  • Human underwriter reviews

• Event Published: LoanDecisionFinalized

• Kafka Topic: loan-decision-finalized

• Consumers:

  • LoanAgreementService

  • AuditService

6. Loan Agreement Signing

• Microservice: LoanAgreementService

• Trigger:

  • Consumes from loan-decisioned where status = APPROVED

  • Or from loan-decision-finalized

• Action:

  • Trigger eSign/eMandate APIs

• Event Published: LoanAgreementSigned

• Kafka Topic: loan-agreement-signed

• Consumers:

  • LoanDisbursementService

  • AuditService

7. Loan Disbursement

• Microservice: LoanDisbursementService

• Trigger: Consumes from loan-agreement-signed

• Action:

  • Call core banking API

  • Update ledgers

  • Send notifications (SMS/Email)

• Event Published: LoanDisbursed

• Kafka Topic: loan-disbursed

• Consumers:

  • NotificationService

  • AuditService

8. Cross-Cutting Services

• AuditService: Listens to all topics, logs actions

• NotificationService: Sends alerts on events like approval, disbursal

  • 
    
    • 
      
    
    

🔄 High-Level Integration & Architecture Flow

1. User initiates Loan Application via frontend (Angular/React)

2. Request routed through Azure Front Door → App Gateway → API Gateway

3. Request flows to onboarding-service (running on AKS)

4. Triggers kyc-service (connects to govt KYC APIs)

5. If KYC successful, calls credit-score-service (calls CIBIL/third-party credit APIs)

6. Score sent to loan-evaluation-service (runs rules & eligibility engine)

7. If eligible, agreement-service is triggered (calls eSign/eMandate APIs)

8. Once signed, disbursement-service calls banking APIs to release funds

9. Kafka-based messaging pushes events to notification-service, analytics-service, audit-service

10. ELK + Grafana show real-time logs and dashboards

    
    

📘 Enterprise Blueprint

• Domain-driven Design with Bounded Contexts

• Shared-nothing Microservices using REST and Kafka

• 12-Factor App Principles

• DevSecOps: Security integrated into CI/CD pipeline

• Policy-as-Code using Azure Policy

Enterprise Blueprint, Principles, and Standards

• Principles:

  • Microservice-based architecture for modularity.

  • Event-driven architecture using Kafka for loose coupling.

  • Compliance-first approach for regulatory adherence.

  • Secure by design with Azure security services.

• Standards:

  • RESTful API standards for microservice communication.

  • Version-controlled infrastructure via Terraform/Bicep.

  • Consistent CI/CD pipeline with automated testing and deployment.

• Governance:

  • Azure Governance using Azure Policy and RBAC.

  • Regular security audits and compliance checks.

  • Architecture Review Board (ARB)

  • Compliance with SEBI, RBI digital lending norms

  • Regular audits via Azure Policy, Defender

  • Secrets rotation via Key Vault automation

Area	Standard/Principle
API Design	RESTful APIs, Swagger/OpenAPI, Idempotency
Logging	Centralized ELK, Correlation ID, PII masking
Auth & AuthZ	OAuth2, JWT, Azure AD
Monitoring	Golden signals (latency, error rate, traffic, saturation)
Resilience	Circuit breaker, retries, backoff
CI/CD	Trunk-based dev, gated release, blue-green deployment
Testing	Unit, Integration, Contract, Load Testing

🛡️ Top 40 Enterprise Risks Register

Risk ID	Risk Category	Risk Description	Priority	Mitigation Plan
R01	Business	Market demand fluctuation	High	Regular market analysis and flexible product strategy
R02	Business	Regulatory changes (SEBI/RBI)	High	Dedicated compliance team, regular updates
R03	Business	Competitive pressure	Medium	Continuous innovation and customer engagement
R04	Business	Product misalignment with customer needs	High	Customer feedback loops and agile development
R05	Business	Reputation risk due to service disruption	High	Ensure high availability with fault-tolerant architecture
R06	Business	Credit risk due to defaults	High	Strict credit assessment and scoring algorithms
R07	Business	Loan fraud	High	Real-time fraud detection with ML models
R08	Business	Inadequate pricing strategy	Medium	Market benchmarking and pricing reviews
R09	Business	Poor user adoption	Medium	User training, onboarding support, UX improvements
R10	Business	Inaccurate financial forecasting	Medium	Advanced analytics and rolling forecasts
R11	Business	Talent shortage	High	Robust hiring, training, and retention programs
R12	Business	Lack of skilled cloud resources	Medium	Certification programs and strategic hiring
R13	Business	Employee attrition	High	Engagement programs, competitive compensation
R14	Business	Change resistance from teams	Medium	Change management and clear communication
R15	Business	Inadequate training	Medium	Continuous learning and development programs
R16	Business	Operational inefficiencies	High	Process automation and monitoring
R17	Business	Downtime in loan processing	High	Redundant systems and performance SLAs
R18	Business	Manual processing errors	Medium	Automation and dual verification
R19	Business	Third-party vendor failure	High	Vendor SLAs, audits, and contingency plans
R20	Business	Delayed approvals	Medium	Process reengineering and automation
R21	Business	Scalability limitations	High	Cloud-native microservices and auto-scaling
R22	Business	Application performance issues	High	Performance tuning, caching, APM tools
R23	Business	System integration failures	High	Robust APIs, integration testing, fallback
R24	Business	Data inconsistency	High	Strong data governance, CDC, validation
R25	Business	Technical debt accumulation	Medium	Regular refactoring and architecture reviews
R26	Business	Data breach	High	End-to-end encryption and Azure security features
R27	Business	Unauthorized access	High	Role-based access control and Azure AD
R28	Business	Insider threat	Medium	Activity monitoring and behavioral alerts
R29	Business	Non-compliance with SEBI/RBI	High	Continuous compliance audits and logging
R30	Business	Weak authentication	High	Multi-factor authentication via Azure AD
R31	Business	Network vulnerability	Medium	Regular penetration tests and WAF
R32	Business	Lack of disaster recovery plan	High	Geo-redundant backup and failover
R33	Business	Ineffective monitoring	Medium	Centralized logging with ELK & alerts
R34	Business	Malware/ransomware attacks	High	Endpoint protection and anti-malware
R35	Business	Security misconfigurations	High	IaC validation and security scans
R36	Business	Cost overrun on cloud usage	High	Cost management policies and budget alerts
R37	Business	Underutilized resources	Medium	Auto-scaling and right-sizing recommendations
R38	Business	High latency for users	High	Azure CDN and edge caching
R39	Business	API rate limiting by partners	Medium	Caching and retry logic
R40	Business	Lack of observability	Medium	Implement full-stack observability with Prometheus/Grafana
R41	People	Talent shortage	High	Robust hiring, training, and retention programs
R42	People	Lack of skilled cloud resources	Medium	Certification programs and strategic hiring
R43	People	Employee attrition	High	Engagement programs, competitive compensation
R44	People	Change resistance from teams	Medium	Change management and clear communication
R45	People	Inadequate training	Medium	Continuous learning and development programs
R46	Operations	Operational inefficiencies	High	Process automation and monitoring
R47	Operations	Downtime in loan processing	High	Redundant systems and performance SLAs
R48	Operations	Manual processing errors	Medium	Automation and dual verification
R49	Operations	Third-party vendor failure	High	Vendor SLAs, audits, and contingency plans
R50	Operations	Delayed approvals	Medium	Process reengineering and automation
R51	Technology	Scalability limitations	High	Cloud-native microservices and auto-scaling
R52	Technology	Application performance issues	High	Performance tuning, caching, APM tools
R53	Technology	System integration failures	High	Robust APIs, integration testing, fallback
R54	Technology	Data inconsistency	High	Strong data governance, CDC, validation
R55	Technology	Technical debt accumulation	Medium	Regular refactoring and architecture reviews
R56	Security	Data breach	High	End-to-end encryption and Azure security features
R57	Security	Unauthorized access	High	Role-based access control and Azure AD
R58	Security	Insider threat	Medium	Activity monitoring and behavioral alerts
R59	Security	Weak authentication	High	Multi-factor authentication via Azure AD
R60	Security	Security misconfigurations	High	IaC validation and security scans
R61	Compliance	Non-compliance with SEBI/RBI	High	Continuous compliance audits and logging
R62	Compliance	GDPR non-compliance	High	Data privacy and retention policies
R63	Compliance	Inadequate audit trails	Medium	Centralized logging and versioned logs
R64	Compliance	Late regulatory reporting	Medium	Automated reporting pipeline
R65	Compliance	Policy violations	Medium	Policy training and enforcement tools
R66	Infrastructure	Network vulnerability	Medium	Regular penetration tests and WAF
R67	Infrastructure	Lack of disaster recovery plan	High	Geo-redundant backup and failover
R68	Infrastructure	Underutilized resources	Medium	Auto-scaling and right-sizing recommendations
R69	Infrastructure	API rate limiting by partners	Medium	Caching and retry logic
R70	Infrastructure	High latency for users	High	Azure CDN and edge caching

📍 Delivery Roadmap

Phase	Timeline	Milestone
Phase 1	Month 1–2	Architecture design, DevSecOps setup
Phase 2	Month 3–4	Build core microservices
Phase 3	Month 5–6	Integration with KYC, CIBIL, eSign
Phase 4	Month 7–8	Security hardening, testing, UAT
Go-Live	Month 9	Production rollout