EP97: The dawn of the AI era in lending

AI is transforming unsecured lending, with rapid market growth driven by instant credit scoring, faster underwriting, and improved customer experience. Traditional loan processes that took weeks are being replaced by AI-based risk assessment models that enable same-day or even instant lending decisions. Banks such as Santander and Scotiabank use AI engines like Kabbage to assess creditworthiness quickly, even for new customers, while reducing manual intervention. AI is also improving document processing accuracy, as seen in JP Morgan’s COIN program and Franklin American Mortgage, which dramatically cut review time and errors. Beyond efficiency, AI enables personalized lending, with banks like RBC offering tailored repayment strategies based on customer behavior. However, challenges remain around data privacy, IT compatibility, and workforce disruption as automation increases. Looking ahead, AI will redefine lending through superior customer experience, widespread automation, and the rise of a data- and algorithm-driven economy. Early adopters stand to gain new revenue streams, cost efficiencies, and stronger customer relationships.