Artificial intelligence is the future of digital lending. A recent study by an international banking group found that AI can cut costs in lending operations by as much as 37%. It is because it reduces risk and removes bias from decision-making. With less human intervention, loans are made quicker and more accurately.
The use of AI will be pervasive in the financial sector over the next decade, which means now is the right time to explore how artificial intelligence could work for your company!
What is artificial intelligence?
Artificial intelligence is a way to make computer systems think like humans. It means that it can learn and solve problems. AI solutions are processing large amounts of data instead of just one number or factor at a time. This technology enables digital lending companies to find a better solution for each customer.
AI has three main functions in digital lending:
- AI Predicts the creditworthiness of future borrowers based on data from past clients' behavior.
- It Optimizes processes and costs by improving efficiency, increasing scalability, and reducing turnaround times with machine learning technology that can do repetitive tasks.
- Enhancing customer experience with chatbots and other digital assistants can provide recommendations, help fill out forms, and answer questions in real-time.
Combining AI with big data allows lenders to make better decisions regarding risk assessment, credit scoring, and product design. The benefits for borrowers are lower interest rates and faster approvals.
How can AI help speed up the loan application process?
Applications for a loan can be long and tedious. They often require submitting personal information, such as Social Security numbers, addresses, and contact information. You can speed this process up with the help of AI. With the use of an AI chatbot, you can quickly submit your application without filling out any forms. The bot will then gather the information it needs from you and submit your application.
All of this can be done within a matter of minutes, much faster than any human employee could do alone. The bot will ask for personal details such as name, address, phone number if it is needed to verify identity or employment status. If not already collected by one of the data verification services, the bot will also request recent pay stubs and bank statements to help assess the applicant's credit risk.
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