We asked ChatGPT to tell us “How AI can support commercial lending decisions”
Here’s what it said.
“AI can assist commercial lending decisions in several ways. Here are a few examples:
- Risk assessment: AI can analyze large amounts of data to assess the creditworthiness of a potential borrower. This includes factors such as financial history, credit score, and current financial position. AI can use machine learning algorithms to identify patterns and predict the likelihood of a borrower defaulting on their loan.
- Automated underwriting: AI can automate the underwriting process, which involves analyzing loan applications to determine the borrower’s creditworthiness. This can speed up the process and reduce the risk of errors.
- Fraud detection: AI can detect fraudulent activities in loan applications and transactions by analyzing patterns and anomalies in the data. This can help lenders prevent losses from fraudulent activities.
- Portfolio management: AI can analyze a lender’s portfolio of loans to identify potential risks and opportunities. It can provide insights into borrower behavior, market trends, and other factors that can affect the performance of the loans.”
A pretty impressive response! We would agree with these points, but we would also add: improved customer experience, both speed and personalisation, and a broader risk management agenda, including regulatory and risk capital enhancements.
However, it is important to note that all of the above elements rely on data. Luckily, at Validis we get Financial Data. We enable businesses to upload their financial accounts in seconds. It’s only with access to live detailed financial data such as this, that AI can really turbo-charge lending decisions.
Beyond this, on the business lending side (esp. the larger end) we still believe that the most important benefit of AI is that it will allow humans to spend more time on value-add activities. So, yes, we believe in the power that smart automation, data and AI can provide; but they’re really just enablers.
Overall, we’re very impressed with ChatGPT and are exploring further use cases at Validis. We are only beginning to scratch the surface of the transformational power of this technology!