If you have been worrying about not having a credit score, don’t worry; artificial intelligence (AI) is making steady inroads into the BFSI (Banking, financial services and insurance) industry, especially in the digital lending space where fintech companies dominate. Fintech is the shortened version of the term financial technology.
What is Artificial Intelligence For Banking?
Ai is helping banks in a way that even we as individual can’t even imagine. AI has made banking industry so smart, versatile and full of advancements. AI helps develops a bettere understanding of customer and their behavior, ai helps banks to detect fraud, detect anti money laundering and make customer recommendations on top priority and hence help in customer experience.
Artificial Intelligence for Credit Score
Using AI and Machine Learning (ML) fintech companies are trying to tap into the 80% of the Indian population who do not have a credit score or credit history. From where you live, where you eat, your social media interactions to the phone that you use, these companies utilize ML to create borrower profiles and assess their credit score. These companies know that tapping into this segment of the population has immense business potential and they are leaving no stone unturned to realize it.
With new kinds of lending methodologies such as peer-to-peer lending, sourcing credit score data is getting increasingly challenging for digital lenders. But they have found the answer in Artificial Intelligence.
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Benefits of Artificial Intelligence in Credit Score
- AI systems solve various problems faced by legacy systems and processes in making instantaneous credit decisions
- With AI technology lenders are able to identify risky borrowers, estimate income capacity and forecast their repayment record
- Due to the increasing reach of mobile apps, fintech firms are able to assess many permission-based data from users
- These apps allow lenders to access GPS data, digital transactions, call and chat logs, contacts and other pertinent details of a borrower to create an income and risk profile using AI technology
At Finserv MARKETS, we use an effective credit assessment system with a combination of time-tested processes and latest technology to create an accurate credit profile for customers applying for all types of loans. The results are tailor-made by Finserv MARKETS where you can apply for different types of loans like Bajaj Finserv personal loan, home loan or a business loan with attractive interest rates and flexible repayment terms.
According to the Boston Consultancy Group, AI can generate 10-15 times growth in the digital lending space by 2023 with a total turnover of more than 10 lakh crore.
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Artificial Intelligence – A Boon for New Borrowers
According to the Financial Express, even today with newer technologies and methodologies, 50% of first-time loan applicants are denied loans due to lack of credit history. Unfortunately, they have to turn to private moneylenders or loan sharks who make a large profit with unreasonably high-interest rates. On the other hand, in spite of hundreds of insightful data points that can be accessed from customers to create more holistic income or risk profiles. Credit bureaus in India still depend merely on a person’s financial history for credit assessment. However, with an increase in adoption of AI, the lending landscape is going to change considerably in India and first-time loan applicants will perhaps breathe a sigh of relief.
Finserv MARKETS, always a forward-thinking financial digital platform, is open to using artificial intelligence and machine learning to make instantaneous credit decisions for new applicants seeking loans on Finserv MARKETS.
With the greater adoption of AI and ML, not just fintech companies but traditional banks and NBFCs can also benefit by creating accurate income and risk profiles. AI algorithms available today can predict future delinquency or good repayment intent with 90% accuracy. Most importantly, AI will help the deserving among the 80% of the Indian population with no or low credit score for personal loan, as well as help financial institutions to minimize their ever-increasing NPAs.
Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus, when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!