The role of artificial intelligence in digital lending platforms

[Kaushal Kumar]

Technological and innovation continue to disrupt the financial industry and have changed how customers engage in financial transactions. Customers now have the ability to make online payments, make investments, transfer funds, and secure loans seamlessly through digital platforms anytime, anywhere, through their smartphone devices. As per the statistics, in 2021, over $7.52 trillion in digital payments were made. And integrating AI into the digital lending app will increase this number even higher.  

Growth Of the Digital Lending Market 

Another fast-growing aspect of the FinTech industry is digital lending. It is the bank-independent loan allocation for SMEs and MSMEs and the personal loans to people. The loan amount sanctioned through the loan management app is relatively lower than the banks. Borrowers can easily apply for loans via online platforms or the application of digital lending firms. The global substitute lending market is expected to reach over 300 billion dollars and grow exponentially. 

AI and Digital Lending Business 

The role of ML and AI in the digital lending industry is essential since they can enhance data analysis to make credit risk assessment more effective. Leading the Digital Lending Platform uses ML and AI to analyze a large amount of data to make informed and data-backed lending decisions and detect suspicious applications, defaulters, and good customers targeted for the cross and up-selling of other offerings. 

Conventional lenders usually use the prospective borrower’s data for assessing creditworthiness. However, with the advancement of technology, especially artificial intelligence models, lenders can now use various data, including digital behaviour, social media handles, digital payment data, and many other data points, for evaluating creditworthiness with higher accuracy. Because the AI models can ingest a larger volume of data from a wide range of sources, they can create credit scores and enable managers to make explainable and informed decisions. 

Benefits Of AI-Powered Digital Lending Platform 

According to the report of 2021, more than 99% of lenders believe that technology can improve the mortgage process. Homebuyers want to shift to digital channels and learn more about the process, obtain pre-qualification, document submission, and get updates. AI will enable vital effectiveness for lenders and transform the end-user experience due to its automated decision-making and data-processing abilities.  

As the best Digital Lending Solution, artificial intelligence is widely used by service and product providers for accurate marketing. With this, the provider can target customers according to their unique demographic data and sentiment because of higher conversion chances. The digital lending platform can use AI similarly to up and cross-sell loan services and products. 

Document management is amongst the primary areas where AI plays an essential role. End-user Digital Lending App has AI scanner tools that convert physical document images into structured PDFs. 

Conclusion 

These are the roles and benefits AI will provide to digital lenders owners. It helps to create user personas, which can be highly useful for identifying similar applications in the future. For example, the positive user experience can refer to the ideal borrower who can easily secure a loan.