Can AI Qualify a Borrower in Seconds?

Can AI qualify a borrower in seconds or underwrite a borrower in seconds? Okay, so it depends. Right. It very much depends. You’ve got consumer lending and you’ve got corporate lending. They are not treated equally even when it comes to AI underwriting. So for consumer lending the answer is mostly yes depending on your risk model.

Consumers for the most part are treated equally when it comes to underwriting for the most part. I know there’s some instances here and there whether or not the consumer is in a certain state or has a certain type of job, but for the most part for a consumer we’re going to check their credit. We’re going to look at their background. We’re going to make sure they’re not a criminal etc. We’re going to make sure their income is in check and you’re going to validate their identity. And I’m sure there’s a bunch of other things you can check in public databases or private databases. But for the most part, you can qualify and underwrite a consumer using AI, rather quickly based on your risk model.

Corporate financing is something completely different. You’re not just underwriting the owner, or if there’s owners plural on the business, you’re also underwriting the business. Okay. There’s a lot more decisioning and research that has to be looked at. AI can absolutely help with that, but it doesn’t mean you’re going to make a decision in seconds like you can with a consumer borrower.

And then lastly, you want to be careful. You don’t necessarily want AI making decisions for you. I think over the course of time, if you start using AI to help underwrite and help pre-qualify, I think you can maybe get to a point where you’ve really trained the AI on your risk model, and it can truly identify fraud or some of those risk models. But at the same time, you always want to make sure you’ve got someone reviewing certain things if they fall in a certain bucket, and then on the corporate side, definitely a lot more to look at.

So can you qualify a borrower in seconds with AI? Yes you can. Does it depend if it’s consumer or corporate? Yes it does. No matter what, always make sure you reviewing files before funds go out the door.