Predictions are revolutionizing the financial world
Financial organizations have already marked the space as one that requires an extensive investment of resources; They realized that this area can streamline business processes and performance dramatically, especially around the potential for saving manpower, saving time, and reducing human error. However, bringing in expertise and capital to support the infrastructure needed to utilize the capabilities of the technology has left competitors in specific industries with a gap in technological capabilities.
I have seen this firsthand in the auto-lending industry. The use of AI is strengthening and it is now possible to identify many financial organizations working to integrate artificial intelligence into their digital products. The main contribution of the integration of AI technology in the financial industry is the ability to process huge amounts of information in a short period. This is especially relevant when underwriting incoming applications for loans. The expectation today by customers is to receive immediate results and it is especially important when a customer is making a big decision. Quick and accurate loan approvals are why many companies who utilize AI in underwriting have been able to attract large amounts of customers, and increase their revenues substantially. However, difficult markets such as non-prime lending, have had more trouble using artificial intelligence. Due to the nature and the basis of the models used in AI, populations that don’t behave normally are much more difficult to get accurate results. Our company, Beyond Appearances has been able to provide accurate and strong results even in difficult markets, such as non-prime lending.
So how has AI helped the financial industry and can it help your business?
Accurate and quick loan approvals
When dealing with credit and banking it is important to understand who the applicant is and whether the data and information they provided is accurate. Artificial intelligence is especially helpful because of its ability to process and cross-reference large amounts of information in real time. Thus it can reduce the staff who checks the applications manually, and reduces the time it takes to decide by accurately valuing the deal. An interesting example is one of our auto-lending clients, which reported that it was able to reduce its employees and increase its margins through accurate underwriting. How does it work? The technology makes it possible to extract and analyze data from loan applications and documents (paystub, credit report) and, together with alternative data, helps formulate the recommended decision regarding the applicant (what terms to offer, what the profit or loss going to be). The process’s automation helps the company to negotiate or approve loans automatically by gathering and analyzing information in real-time and with a higher level of accuracy. In addition, the technology predicts when the applicant is going to stop paying and then offers terms that ensure that if the prediction is correct the lender will stay make the desired margin they want.
Loan collection and management
Artificial intelligence can help collection departments in digital channels, primarily through identifying and even predicting payment behavior and preferences. The combination of big data and artificial intelligence creates a host of opportunities to target problematic customers before they become delinquent and manage the operations based on the amount of future risk the company faces. This helps reduce the number of customers who become delinquent and increases the payment collection efficiency. For example, a subprime lender we work with leverages their customer data by combining smart algorithms to improve the efficiency of collecting loans by prioritizing contact with customers whose payment behavior trends have changed.
Preventing fraud
In the financial industry, in particular credit & banking, artificial intelligence is considered a very effective tool in detecting and preventing fraud, mainly thanks to the ability to process and cross-reference large amounts of information in real-time. For example, an insurance company we work with replaced a large amount of their claims workers with smart software based on our AI. The software makes it possible to scan and analyze vehicle damage and medical documents, together with other sources of information, to help formulate the decision regarding the claims. The software guides the user by alerting them to suspicious or unusual information that should be investigated to quickly identify if fraud was committed.
Can my business start using AI?
Yes. In our experience, many companies we work with lack resources and teams to implement artificial intelligence, and then the software becomes costly due to the overhead expenses associated with implementing the technology. This is why we created Beyond Appearances which allows any business and their employees to work with AI without needing expertise. We not only provide technology, but also the know-how needed to deliver bottom-line results. Businesses can use our warehouse of rule templates relevant to their sector and quickly implement our platform.
If you are interested in speaking with us, and learning how we can help your business increase revenues, please reach out to me at sean.b@scorelate.com .