The Impact of AI in Digital Lending and Loan Underwriting

Abstract

In almost all industry worldwide Artificial Intelligence is playing an important role. Whether it is manufacturing industry, education sector, finance sector, healthcare industry everywhere AI’s role is significant one. Like other industries in financial industry also it playing a very crucial role. In financial industry each and every activity of most of the organisations are digitalised. In this environment customers no need to visit the banks and financial institutions to apply for the loan as well as company no need to visit the customer’s place to verify the authenticity of the information given by the customers. They can do the entire loan processing without physically visit the customer’s place. It reduced cost involved in the loan processing and time required to process the loan. Ultimately customer will be benefitted because if there is more cost in the processing the loan, the entire Burdon will be placed on the head of the customers. Even if we are enjoying numerous benefits it essential to consider the problems associated with the AI-driven loan lending and underwriting such as privacy and ethical concerns. So, this paper critically analysed role of AI in digital lending and loan underwriting. It covers benefits of AI-driven loan lending and underwriting, limitation and future trend of the same.