The banking roadmap for using AI in credit risk

Artificial intelligence (AI) has long since moved from the realm of science fiction to reality, with reports of new applications from transportation to cybersecurity that seem to emerge every day. At the same time, technology has made fairly limited inroads into the banking industry. The latest research from PYMNTS indicates that this is changing – and fast.

More than three-quarters of financial institutions (FIs), or 78%, have recently invested in AI-based systems (21%) or plan to do so within the next 12 months (57%), specifically for the purpose of to optimize credit and loan operations. Just as significantly, it is no longer just large FIs that prioritize AI; 86% of mid-sized banks (with assets between $ 25 billion and $ 100 billion) plan to invest in the technology, and 41% of them plan to do so within the next six months.

AI In Focus Playbook: The Bank’s Technology Roadmap, a collaboration with Brighterion, tracks the accelerated adoption of advanced learning technologies in banking and examines what powers it. The playbook is based on a survey of 100 FI executives and builds on research conducted by PYMNTS since 2018 on the use of AI and other sophisticated IT systems in banking, healthcare and other.

In this playbook, we reveal key findings from our research, examine some of the perceived barriers around AI adoption, and offer first-hand perspectives from bank executives who have integrated AI systems into their businesses. own organizations.

One of the most salient findings of our latest research is the urgency with which FIs are approaching AI and their broader innovation agendas today. The top three reasons FIs cited for investing in technology are to increase the speed and accuracy of transactions (cited by around 90% of FIs) and to meet the needs of existing customers (cited by 77%). These far outweigh longer-term goals, such as the ongoing digital transformation.

This drive to better respond to customer demands and expectations can help explain why AI has seen a faster adoption rate over the past three years than any other IT system we’ve looked at. The usefulness of AI in detecting and preventing fraud is well known, but it also enables banks to understand and respond to their customers’ circumstances and needs in real time and at the account level. These capabilities are particularly valuable in today’s dynamic economic environment.

Diana caplinger, executive vice president for customer relationship management (CRM), intelligent automation and personalization for Sad, said the bank is already using AI in the way it interacts with customers and sees potential growth in areas like credit and lending.

“This technology will be very useful in improving accuracy and efficiency while simplifying the customer experience,” Caplinger explained in the playbook case study. “The customer journey can be personalized, especially if the customer is an existing customer, so that online or offline interaction is based on customer preferences and requirements. “

For more information and data analysis on the growing use of AI in banking, download the playbook.

About the playbook

AI In Focus Playbook: The Bank’s Technology Roadmap is a report based on research and interviews in collaboration with Brighterion examine how banks are using AI and other advanced IT systems to improve credit risk management and other aspects of their operations.

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