The future of lending thanks to artificial intelligence


Gamco Team

The financial sector is constantly implementing new technologies to modernize and digitize its functions. One of the reasons for this is the processing of a large amount of very specific data that must be handled with absolute precision.

Artificial intelligence could not be left out of this equation as the automation of processes such as credit risk assessment for bank lending is becoming increasingly common.

What role does AI assume in terms of bank lending?

AI has the potential to significantly transform the way in which people use and use banks They provide loans and assess the credit risk of applicants. With their help, banks can process large amounts of data and make more accurate predictions about an applicant's ability to repay a loan.

► You may be interested in: How to detect delinquent customers and avoid defaults? 10 signs of delinquency

One of the most common applications of AI in lending banking is the use of machine learning algorithms to assess credit risk. These algorithms can analyze large amounts of financial and non-financial data, such as credit history, income and expense information, online behavior and social networks, to determine an applicant's level of risk.

In addition, it can also be used to automate and optimize bank lending processes, which can reduce operational costs and improve efficiency in loan management. For example, AI chatbots can be used to answer customer questions and guide them through the loan application process.

Another area where it is transforming the lending industry is in fraud prevention. Financial institutions can detect suspicious patterns of financial activity and prevent fraudulent lending from occurring.

Benefits of implementing Artificial Intelligence in the lending process

The implementation of artificial intelligence in the bank lending process can provide a number of benefits, among which we can include:

  1. Increased accuracy and speed. Artificial intelligence can analyze large amounts of data faster and more accurately than humans, which can improve the accuracy of the credit evaluation process. This could lead to a reduction in appraisal errors and greater efficiency in decision making.
  2. Cost reduction. As mentioned above, the automation of tasks through artificial intelligence can significantly reduce operating costs and increase the efficiency of the lending process. This can lead to reduced administrative costs and improved profit margins.
  3. Improved customer experience. It can improve the customer experience by offering a faster and more efficient credit evaluation process, and by enabling greater personalization of banking services.

► You may be interested in: What are the advantages of artificial intelligence?

Credit risk and AI

Risk assessment is a critical process for banks when making loans. The artificial intelligence can help improve this bank loan risk assessment process in several ways.

First, by using machine learning algorithms, it can learn to identify patterns in the data and use them to predict default risk. One of the solutions offered from Gamco is ARM Saas which allows SMEs to use artificial intelligence to predict this potential risk of non-payment and mitigate its effects.

In addition, it is able to help banks automate the credit risk assessment process, known as credit scoring, which despite being a digitized process, artificial intelligence brings considerable value in reducing resources because instead of relying on credit analysts to manually review each loan application it can quickly process the information and provide a risk assessment based on the available data.

Finally, it can help reduce human bias in the credit risk assessment process. By using machine learning models, banks can avoid the subjective influence of credit analysts and reduce the possibility of discriminatory bias in decision making.

As for the future of lending with artificial intelligence, it is very likely that we will see increased adoption of AI technologies by banks in credit risk assessment and loan process automation. We can also predict that new AI technologies will be developed that will enable more accurate risk assessment and better decision making in lending.

Where is Big Data applied?

We often wonder where Big Data is applied and we can assume a great relevance of Big Data for business. This explains the great in [....]

Read More »
Artificial Intelligence in the Fintech market

Before talking about artificial intelligence in the Fintech market, we would like to mention that the term Fintech is nowadays applied to the technologies that are [...]

Read More »
What is chargeback? Find out how it affects your business

Chargeback refers to refunds that occur when, at the request of a cardholder, the bank requests a refund on his or her behalf [...].

Read More »
What is AIoT (Artificial Intelligence Of Things)?

If we look at them separately, the Internet of Things (IoT) and Artificial Intelligence (AI) are powerful technologies and if we combine them, we get a [...]

Read More »
See more entries
© Gamco 2021, All Rights Reserved - Legal notice - Privacy - Cookies