How Technology Is Reshaping Risk and Customer Experience

The integration of artificial intelligence (AI) into lending practices is revolutionizing how banks and NBFCs assess risk, prevent fraud, and interact with customers. By replacing outdated, manual processes with data-driven algorithms, financial institutions are achieving unprecedented levels of efficiency and accuracy. This article examines AI’s transformative impact on lending, from credit scoring to collections, and highlights Poonawalla Fincorp’s pioneering efforts in this space. Rethinking Credit Assessment with AI Traditional credit scoring models often fail to capture the financial realities of thin-file or new-to-credit borrowers. AI bridges this gap by analyzing alternative data points, including digital transaction histories, utility bill payments, and even psychometric evaluations. For example, a freelancer with irregular income but consistent savings patterns may now qualify for a loan based on AI’s holistic risk assessment. Machine learning models co...