IBS Journal May 2018
31
ARTIFICIAL INTELLIGENCE IN LENDING: EMERGING INNOVATION THEMES
Source: Cedar Consulting
B. Compatibility
Adopting AI into an existing IT infrastructure would require compatibility, which is perceived by several banks as a hurdle to integrate this into its existing architecture. While this would be a short-term aberration, one would expect this to be overcome quite soon, considering the magnitude of the benefi ts that AI can bring from a fi nancial standpoint.
C. Human intervention
With the use of chatbots and virtual assistants, more than 40% of mobile interactions are to be with VAs. An estimated 57% of human jobs are likely to be redundant in the next decade, thereby making the new era of jobs to be so new – that they do not exist yet! This would obviously imply realignment of roles, restructuring of credit organisations and re-engineering of credit processes. Obviously, easier said than done.
Crystal gazing: a peek into the future
To debate whether AI is good or bad for the lending industry is quite a mute point. This is the reality and embracing it totally would be a prerequisite for anyone to survive in the new world. And early
birds do get the benefi ts too: be it the identifi cation of new revenue streams with non-traditional borrowers that conventional methods would have rejected, or in eliminating human errors while improving the speed of loan process, banks do stand to gain both on the topline from new customer segments and bottom-line from cost effi ciencies. Needless to say, the customer of course gets to gain the most in this, as not only would this mean faster loans with lesser paper and error free environment, but also a personalised experience and potentially reduce much through smarter, thriftier payments.
So, what does the future have in store if things were to go in the direction they are already speeding in? Here’s a bit of an indulgence and some crystal-ball gazing, with particular focus on what could be in store for banks, customers, suppliers and industry players in the lending space from the world of AI.
1. Customer experience makes all the diff erence The customer is always king, and will continue to be. Chatbots, virtual assistants and robo advisors will evolve to react with emotional intelligence, insights and customise with language sensitivities. Expect there to be a revolution in customer experience, this could be the new world order that differentiates winners from the rest.
2. Automation – the new paradigm Business processes would now evolve to a different paradigm. AI, machine learning and natural language would mean new organisation structures, new roles, new processes in the world of credit and lending. A paradigm shift, in the real sense.
Source: Cedar Consulting
3. Emergence of data and algorithm economy Every piece of data – be it numbers, words, action, inaction – all count to be part of the new world of algorithm economy. Scaling the manual management of processes and segregation of data, everything at scale is expected to be managed by the algorithm economy. The effi cacy of this algorithm, at the end of the day, would be the secret sauce of the winners at the end of this race.
www.ibsintelligence.com 31
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