Whether it's car finance, a student loan, a mortgage or an unsecured loan, here in the UK we are very much a nation of borrowers.
As with so many large industries, banks and lenders are constantly seeking innovative ideas to improve their working processes. Artificial Intelligence (AI) and machine learning are two key ways that this can be achieved.
Here are a few ways that AI has the potential to revolutionise the lending market.
One of the most important processes in the loans industry is determining how likely an applicant is to be able to meet repayments. It is a big data task that involves analysing the available information about their financial and credit history.
This risk assessment can be a difficult task, especially when some information is unavailable.
Processing loan applications
There are a lot of administrative tasks involved in loan management, and many factors can cause delays and inaccuracies. Nowadays, some of these processes have been automated - but there is still plenty of scope to go further.
For example, with so much information now available online, data entry can be automated to speed up the process.
Verifying information included with loan applications is possible as well - though human intervention is still vital to avoid costly errors slipping through.
Answering customer queries
It's not just loan processing and applications where AI and automation are having an impact. The increasing use of chatbots allows banks and lenders to answer questions from potential borrowers on their websites quickly and efficiently.
Using AI and natural language processing, chatbots offer a cheaper alternative to hiring extra customer service staff. They also allow borrowers to have their questions answered instantly online with a minimum of fuss.
The technology is not fully accurate yet, but it has undergone huge advancements in the past few years.
Other applications for lending
AI can also be used to help find new customers, attract them and engage with them. Advertising analytics is one such example - helping to accurately target new borrowers and review results to improve future campaigns.
There are more tools in development that harness the power of AI, such as Personetics. This uses machine learning to analyse individuals' financial habits and create personalised solutions for them - for example, a bespoke loan repayment schedule.
AI is revolutionising the lending and loan management industry in a range of exciting ways, and looks set to evolve even further in the future.
Copyright © 2018 Article was made possible by site supporter Victoria Harrison