header icon
Solutions
header icon
Products
header icon
Platform
header icon
Developers
header icon
Company
English
English
3 WAYS DATA AND AI ARE IMPROVING LENDING IN BANKING & FINTECH

3 Ways Data and AI Are Improving Lending in Banking & Fintech

August 23, 2024

The rise of big data analytics, combined with rapidly advancing artificial intelligence (AI) and machine learning capabilities, has created a bevy of new opportunities for financial services providers to offer optimized AI lending services

By leveraging these data-driven tools, providers can design AI lending products that are fast and efficient, and highly relevant and accessible to a wide range of new and existing customers, while still ensuring credit decisioning is safe and prudent. 

And with myriad surveys revealing a well of unmet consumer demand for improved lending offerings, data-driven AI lending represents a major opportunity for providers to drive new revenue streams and enhance customer engagement, satisfaction and long-term loyalty. 

Here are three key ways a data-driven approach can help financial services providers offer better–and more profitable–lending solutions. 

1. Smarter, safer credit decisions

Traditional credit scoring methods are based on relatively limited data that don’t always give an accurate assessment of a potential borrower’s creditworthiness. In contrast, AI and machine learning enable a more comprehensive and dynamic approach. 

These tools can capture and analyze much larger datasets, including wider transactional and bill payment history, as well as non-traditional data such as social media activity and online behavior, to provide a more nuanced and accurate picture of a potential borrower’s likelihood to repay. 

Combining this broader data input with the predictive capabilities of AI enables a provider to make a well-informed, forward-looking assessment of a borrower’s financial health and credit risk. Meanwhile, AI’s powerful fraud-detection capabilities make it easier than ever to flag inconsistencies in application data that may indicate attempted fraudulent activity, further ensuring a safe lending process. 

2. More personalized, relevant offers 

Along with improving credit decisioning, big data also offers the ability to leverage insights gleaned from past customer behavior and activity to customize loan offers and terms to fit individual borrower needs. 

Lenders can use this information to tailor what type of loan is offered to a given customer and when, as well as interest rates, repayment terms, and loan amounts–a personalized approach that ensures loan offers are highly contextual and relevant, meeting users’ unique needs and preferences and helping foster long-term satisfaction and loyalty. 

Buy Now Pay Later - The Way it Should Be for Consumers

Furthermore, AI can continually monitor relevant datasets, dynamically suggest loan products or adjustments to existing loans based on changes in a borrower’s financial situation or behavior, continually ensuring that offers and terms are attractive for the customer and financially prudent for the lender.

3. Enhanced servicing and support 

With customer-centricity becoming ever-more critical to success in financial services, loan providers can leverage data and AI to offer significantly improved customer support experiences to borrowers. 

How AI Is Helping Banks Improve Customer Service, Security

Today’s highly sophisticated chatbots and conversational AI-driven customer service tools can provide fast, relevant, highly functional assistance on a basis across a multitude of channels and contexts, enabling borrowers to apply for loans, track applications and manage repayments on a 24/7 basis, via the channels and platforms that are most convenient for them. 

By offering these positive, user-friendly support experiences, providers can stand out from the competition, generate high levels of customer satisfaction and deepen engagement over the long term–all critical elements of driving robust, durable revenue streams from loan products. 

Want to learn more about data-driven and AI lending?

Contact us to find out how your platform can reap the rewards of data-driven AI lending.

Platform
September 23, 2024

3 Ways Banks Can Overcome the Tech Modernization Hurdle

Financial institutions must modernize their core banking technology to meet consumer demand for digital and remain competitive. Galileo’s Tania Grambo offers three tips to successfully accomplish this critical tech transformation.

See More
Platform
September 17, 2024

Fintech and Banking Through Human-Centered Strategic Partnerships

How human-centered fintech partnerships drive success through collaboration, innovation, and the personal touch in financial technology.

See More
Platform
September 16, 2024

How Brands and Banks Can Win Big with Embedded Finance Partnerships

Banks and brands both stand to reap major rewards from joining forces to offer embedded finance tools. Here’s how both sides can get the most out of these high-potential partnerships.

See More
AI monitoring financial transactions for fraud.
Guide
September 12, 2024

3 Steps for Optimizing Financial Fraud Detection Tools

Payments and financial services fraud isn’t going away–and it’s becoming increasingly expensive. Here’s what providers need to consider when developing and analyzing cost-effective fraud detection tools.

See More
Platform
September 11, 2024

Adapt or Become Irrelevant: Incremental Core Modernization vs Full Transformation

Banks need to upgrade their banking cores. Learn more about three of the most important considerations your FI must weigh when plotting your path forward.

See More