Why Commercial Lending Must Go Beyond Speed

Digital technology has turbocharged the commercial lending process, with fast, highly automated decisions seriously slashing the time to “yes.” But to navigate the uncertain times ahead, lenders will need more than speed from their fintech.

While traditional banks can now make simple credit decisions as quickly and efficiently as technology-driven “alternative” lenders, the current economic climate means that more commercial lending decisions are now far from simple.

In the credit-sensitive cycle we’re in today, yesterday’s safe bets can rapidly become tomorrow’s bad credits. So, no matter how quickly your commercial lending technology can access and process historic financial data, it’s your ability to predict the future and react accordingly that counts.

Traditional lenders can rise to the occasion in two ways. First, they can fall back on the strengths that set them apart from alternative lenders – namely, their ability to advise their customers, develop long-term relationships and provide a full range of banking products.

Second, they can look forward and support their decisions and relationships with predictive insights, powered by artificial intelligence (AI).

With AI-driven analytics, commercial lenders are able to take automation to the next level, and draw on a wider, richer set of data to build a fuller, deeper and more dynamic picture of customer and prospect businesses.

By analyzing not only historic financials, but also covenant, transaction and market data, news feeds and social media, firms can both show how things are for business customers – and predict where they could be heading. 

Whether falling share prices or negative news stories, early warning signs that a business is in trouble empower lenders to intervene before a problem takes hold. The trick is to sift through a mass of constantly changing information, pull out the salient points and prompt the right people at the right time to take the right action.

That’s what AI does best, with greater pace and accuracy than a human ever could. As a result, it could now help banks identify lending opportunities that lesser technology might reject out of hand.

Speed is still important – and automated workflow will continue to help traditional banks keep up with alternative lenders and customer expectations. But now, with credit risk back on the rise, banks will also have faster, deeper insights to inform their decisions, outthink the market and overtake the competition.