Navigating the Evolving Landscape of AI in Loan Technology

In Informed’s 2023 loan technology survey, a noteworthy 68% of organizations reported harnessing the power of artificial intelligence (AI) in loan processing and funding. (This year’s report isn’t yet out, but spoiler alert – this number rose to 76%) The statistic underscores a significant shift in the industry towards embracing cutting-edge technology. However, equally compelling is the forward-thinking approach of 63% of organizations planning to leverage AI in securitization in the near future, followed closely by 62% in loan servicing and 61% in loan processing and funding.

This trend aligns with the dynamics of a fluctuating market where lenders are strategically positioning themselves to be agile while focusing on technology solutions that lower operational expenses. A closer look shows an uptick in financial services honing in on niche technology advancements and establishing strategic partnerships, showing the industry’s strategy to navigating a tightened economy.

Amidst this landscape, there’s a universal trend  — a pursuit of more loans, less risk, and less fraud. It is imperative to sustain a focus on technology, but with an added emphasis on swiftly realizing return on investment (ROI).

We’ve seen the delicate balance between making technology investments and ensuring that financial institutions (FIs) thrive, progress, and maintain agility. There is also an ongoing debate between digital and paper processes.

Despite divergent opinions on the future, the ability to digitize paper and seamlessly integrate into existing workflows is now a must have. This allows FIs to remain competitive without requiring an entire infrastructure overhaul or a directional shift. In a not so surprising revelation, 55% of surveyed organizations express lingering concerns about fraud and compliance, highlighting the ongoing importance of addressing vulnerabilities.

In conclusion, the loan technology survey not only outlines the state of AI adoption but also shed light on the strategic foresight guiding organizations. The delicate balance between technology investment, agility, and addressing industry concerns remains at the forefront of financial institutions’ endeavors.

In 2024, the challenge is clear — staying ahead of trends, mitigating risks, and embracing technology that not only meets current needs but also propels the industry forward. Excited to see the results of Informed’s 2024 Technology survey and learn how far the industry has come.

Jessica is speaking at Bank Automation Summit and is available to chat.