The health of your financial life greatly depends on your credit score. A person’s credit score is an indicator of his willingness to repay the loan back to the lender. Financial institutions have been relying on this score to make lending decisions for all kinds of customers.
In such a case, it is important for banks to mitigate unwarranted risks, which can be achieved by migrating to newer technology.
In the traditional score calculation method, only certain data points are considered. This may leave some worthy borrowers behind, because they may not have the desired score. If the dataset contains unstructured data that does not fit the parameters and values, and outliers, the method can be expensive, costly and also give incorrect predictions.
How AI and Data Are Impacting The Sector:
Previously, banks calculated the credit scores based on the borrowers’ payment histories. But these days, they are interested in taking into account non-traditional sources of information such as social media activity, messaging patterns, Google Analytics, etc. Thus, Artificial Intelligence ables the system to process and interpret additional data to allow for cheaper, greater, and quicker decisions. AI/ML can help a potential borrower with an inadequate credit score to get access to credit, which was impossible previously.
The advantages of using Artificial Intelligence to streamline the lending process are broad; (1) it can process huge amounts of data quickly, (2) better analysis results in a reduction of cost of credit risks, (3) increased the number of individuals whose creditworthiness can be measured.
How BigAI Can Help:
BigAI promises to identify new opportunities in your data using Machine Learning. The product is powered by Artificial Intelligence-powered automation that drives cost-savings and faster time to value. Our solutions allow financial institutions to combine structured and unstructured data, thus improving decision-making greatly. Predictive banking analytics can help your organization detect potentially risky customer relationships and prevent bank fraud.
Clearly, Artificial Intelligence in the future of the lending sector. Financial institutions are able to make better decisions, with a larger scope of data taken into consideration. With large banks upping their game by incorporating AI and ML into their processes, banks globally are transforming to adapt to ever-changing technologies.