Better Lending with Smart Technology
Technology Tools in Lending
The digital landscape of financial services has undergone a seismic shift, particularly in the wake of the global pandemic that necessitated a rapid adoption of online and mobile services for everything from food delivery to financial services. As this world continues to change, a large group of technology tools have evolved and are commonly referred to as (or misnamed) artificial intelligence (AI). These tools offer lenders the opportunity to meaningfully improve lending processes and deliver better products and experiences for borrowers. From application to repayment, new smart technology tools like supervised machine learning or large language models are helping our teams improve how they work across the entire lending life cycle. It is undeniable and transformative.
Fintechs have been at the forefront of offering online financial services to working people, irrespective of their location, appearance, or credit history. This approach has helped enhance credit accessibility for millions of individuals. However, implementing smart technology goes beyond that easy-to-complete application on mobile devices. For example:
- Enhanced Customer Support: Algorithms powered by human-supervised machine learning (ML) models optimize marketing efforts, improve application experience and increase payment success rates.
- Efficiency in Service: Large language models (LLMs) provide support along the customer journey from application to loan servicing, whether it is supporting a chatbot or representatives with knowledge management. Overall, it improves the efficiency of live agents, allowing them to focus on complex, value-added activities.
The Evolution from Automated to Augmented Decisions
Modern lending practices have evolved from rigid processes to more dynamic, data-driven strategies. This “augmented intelligence” supervised machine learning can enhance human decision-making, providing a more holistic and data-enriched picture of a borrower’s potential. The true power of smart technology in lending extends beyond analyzing traditional credit bureau data to identifying alternative credit data that is displayable, disputable and correctable. Combined with a lender’s own loan performance database, this data provides a more comprehensive assessment of borrowers’ financial behaviors and ability to repay. Supervised machine learning algorithms allow lenders to update their credit policies more frequently and efficiently based on current market environments.
Traditional banks have often sidelined non-prime borrowers or those with limited credit histories. However, new technologies power greater analytical prowess and open new doors, making credit more accessible to underserved populations. By considering a broader spectrum of data, such as bank transaction histories or bill payment history beyond loan products, data-centric lending algorithms foster a more inclusive lending environment free from the uninformed judgment of some human decision-makers.
The Augmented Intelligence Advantage
Smart technology’s role isn’t confined to backend processes; it’s revolutionizing customer experience. From the initial application stage to ongoing customer support, LLM and supervised ML are available to make operations smoother and interactions more personalized. Intelligent chatbots, predictive analytics for customer queries and personalized financial advice all come together to form a support system that’s both efficient and empathetic, which is particularly crucial for individuals with less-than-perfect credit histories.
In our journey integrating new technology tools, we’ve learned the importance of customization. Our customers have unique needs, and our technology provides scalability to serve this significant segment effectively.
Overall, tools like supervised ML and LLM enable lenders to refine their customer support, making it less cumbersome and more intuitive. The ability to anticipate customer needs and provide swift, predictive assistance lowers the barriers to successful loan repayments. Proactive technology applications even have the ability to identify potential payment issues, helping customers stay ahead and avoid financial pitfalls.
Infusing new technology tools across the lending life cycle is not about replacing the human aspect but enriching it. We envision a lending ecosystem where technology complements empathy; decisions are driven by data but guided by ethics, and access to credit is not just a transaction but a step toward financial empowerment for all.
The future of lending resides in harnessing the full potential of new technology tools related to AI, not just for improved profitability but for greater fairness, inclusivity, and resilience in the financial world. As we continue to innovate, we’re setting new benchmarks in fintech, making the lending process more thoughtful, one decision at a time.