Technology has impacted every aspect of our daily lives, from how we work to how we communicate to how we shop. So it’s no surprise that it’s also increasingly impacting how consumers manage their money. American Bankers Association inspection We found that 71% of consumers prefer to manage their bank accounts digitally. inspection According to a survey conducted by Chase, most banking app users prefer to use one app to handle all their money-related needs, including credit monitoring, budgeting and savings.
This is proof that online banking is just the tip of the iceberg, a modern minimum for financial institutions. While most organizations have embraced some aspects of digital banking, consumers expect their most trusted financial institutions to take the next step and leverage technology across their other services. If not, they will move to a technology-first competitor that offers a better, more robust experience.
Using Technology for Better Lending
One area that needs reimagining is consumer lending, and there has never been a more urgent need for change than now. With relentless inflation forcing consumers to rely on credit as their lifeline, consumer debt levels are now at an all-time high. This underscores the mission of financial institutions: to provide customers with the funds they need most quickly and easily, while providing a positive experience along the way.
But as economic pressures intensify, some borrowers Struggling To keep up with loan repayments, financial institutions have become more cautious about issuing credit. It’s a fine line. How do you meet the growing demand for credit and expand your customer base without exposing your organization to unnecessary risk?
It all comes down to technology. AI can facilitate your mission in three main ways:
- Get started faster: Processing loan and credit applications is inherently a long and manual process that requires thoroughness that is difficult to speed up without cutting corners. Well, at least for humans. AI can help us process information faster and more deeply than we can. Leveraging this technology in consumer lending can help us generate faster.
- Risk reduction: Faster processes often come at the expense of increased risk, but they don’t have to. Thanks to its ability to process data from multiple sources simultaneously, AI can use the full range of information about an applicant’s credit history, existing accounts, and more to make faster risk assessments, facilitating comprehensive decision-making.
- A better experience: When processes are smooth and decisions are made faster, customers have a much more positive overall experience. In a competitive market where customers are spoilt for choice between traditional financial institutions and cutting-edge, tech-savvy fintech options, these experiences go a long way toward creating long-lasting loyalty.
But is AI so good that it can’t be real?
While other industries are rapidly adopting AI, the financial sector has been slower to adopt new technologies than most. Some fear that the technology will soon be too heavily regulated, while others fear that the current lack of regulation will make it too risky to use.
Both sides make fair points. Regulations ~is It’s coming, but it’s not widespread yet and probably won’t be for a while. But when that day comes, AI, like all other groundbreaking technologies that came before it, will likely be regulated to be safe to use, but not so restricted that it can’t be used at all. But what about the risks in the meantime?
Fears about AI are growing, especially in the financial sector, where sensitive customer data is used to make important decisions that have a major impact on individuals’ lives. If bias, data misuse, and poor algorithm training creep in, financial institutions could mistakenly grant credit to untrustworthy customers or deny credit to qualified customers. It’s important to understand that this technology isn’t inherently bad or biased. What matters most is how we use it and how we oversee it.
The key is to use trusted, well-trained, and stable AI tools like the Amount platform. We have access to a wealth of data assets with well-defined target variables for credit performance and fraud, and we are always researching ways to make our decision-making platform smarter and more versatile. We provide a set of models that are developed, monitored, and maintained to address critical risk issues, and we can build custom models tailored to specific customer use cases. For credit lending, we use OCR technology to parse bank transaction history and extract cash flow attributes to improve our ability to accurately assess creditworthiness. We then integrate this data into our underwriting models to make informed credit decisions based on real insights rather than biased guesses.
But do customers want it? The general consensus is that there is a thirst for this technology and the positive impact it can bring. According to a recent report by KPMG: Consumer Research51% of U.S. consumers are “very or very” excited about GenAI, and 70% believe the benefits of GenAI outweigh the risks associated with the technology. While it is true that some consumers may be resistant to the use of AI, financial institutions can adopt it with confidence that most consumers will be open-minded and expect it in the near future.